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Social Science Clinic => Economics => Topic started by: gbarreiro on Sep 7, 2020

Title: People sometimes worry that American trade with other countries will lead to large U.S. trade ...
Post by: gbarreiro on Sep 7, 2020

People sometimes worry that American trade with other countries will lead to large U.S. trade deficits and the movement of massive amounts of American capital out of the country. This worry is unfounded because countries cannot
◦ spend more than they earn.
◦ have both current account and financial account deficits at the same time.
◦ invest more than they save.
◦ increase their trade with other countries without increasing their savings.
◦ increase savings at the same time that a trade deficit grows.

Title: People sometimes worry that American trade with other countries will lead to large U.S. trade ...
Post by: sabina576 on Sep 7, 2020

have both current account and financial account deficits at the same time.