(1) Does the United States' unique position in the world economy allow
the country to safely run persistent external deficits?
The world relies on the U.S. dollar—more than 60 percent of global monetary reserves are held in U.S. dollars—61.4 percent as of the third quarter of 2013 (International Monetary Fund, 2013). Consequently, Deutsche Bank Research (Karczmar, 2004) concludes that the U.S. dollar’s function as the main reserve currency makes the current-account deficit inevita...
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...). Retrieved from http://www.imf.org/External/np/sta/cofer/eng/index.htm
Karczmar, M. (2004). The U.S. balance of payments: widespread misconceptions and exaggerated worries. Frankfurt am Main, Germany: Deutsche Bank Research. Retrieved from http://dbresearch.com/PROD/DBR_INTERNET_EN-PROD/PROD0000000000180032/The+U_S_+balance+of+payments%3A+widespread+misconceptions+and+exaggerated+worries.pdf
Lizardo, R. A., & Mollick, A. (2009). The sustainability of the U.S. current account deficit: Revisiting Mann's rule. Global Economy Journal, 9(4), 1-19. doi:10.2202/1524-5861.1532
Obsfeld, M., & Rogoff, K. S. (2005). Global current account imbalances and exchange rate adjustments. Brookings Papers On Economic Activity, 2005(1), 67-146.
Tobin, J. (1990). Eight myths about the dollar. In S. Gerlach, & P. A. Petri, In The Economics of the Dollar Cycle. Cambridge, MA: MIT Press.
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