The US current account, sustainability, and the international monetary system
The result's identifiers
Result code in IS VaVaI
<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F62156489%3A43110%2F21%3A43920401" target="_blank" >RIV/62156489:43110/21:43920401 - isvavai.cz</a>
Result on the web
<a href="https://doi.org/10.1016/j.ecosys.2021.100875" target="_blank" >https://doi.org/10.1016/j.ecosys.2021.100875</a>
DOI - Digital Object Identifier
<a href="http://dx.doi.org/10.1016/j.ecosys.2021.100875" target="_blank" >10.1016/j.ecosys.2021.100875</a>
Alternative languages
Result language
angličtina
Original language name
The US current account, sustainability, and the international monetary system
Original language description
In this paper, we examine the sources of the US current account imbalances and discuss the role of the international monetary system in enabling the US in carrying such external deficits. There is evidence that the stochastic properties of the US current account are not compatible with the intertemporal national budget constraint. We argue that this is likely to be related to the dominant role of the U.S. dollar as an international reserve asset, which allows the US to meet international demand for safe assets and allows borrowing at very low interest rates. Results from a structural VAR model indicate that temporary shocks dominate the current account in the short run, whereas domestic permanent supply shocks and preference shocks contribute significantly to US current account movements in the long run. To the extent that temporary shocks stem from aggregate demand, stabilizing aggregate demand is important in achieving long-term sustainability in the current account. Finally, the paper discusses the role of the international financial system and the international role of the U.S. dollar in contributing to US external imbalances.
Czech name
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Czech description
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Classification
Type
J<sub>imp</sub> - Article in a specialist periodical, which is included in the Web of Science database
CEP classification
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OECD FORD branch
50206 - Finance
Result continuities
Project
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Continuities
I - Institucionalni podpora na dlouhodoby koncepcni rozvoj vyzkumne organizace
Others
Publication year
2021
Confidentiality
S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů
Data specific for result type
Name of the periodical
Economic Systems
ISSN
0939-3625
e-ISSN
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Volume of the periodical
45
Issue of the periodical within the volume
4
Country of publishing house
NL - THE KINGDOM OF THE NETHERLANDS
Number of pages
14
Pages from-to
100875
UT code for WoS article
000727503700007
EID of the result in the Scopus database
2-s2.0-85117374415