The US Current Account, New Economy Services, and Implications for Sustainability
Year: 2004
Type: article
Abstract: The paper considers the implications for sustainability of the US current account of widespread uptake of New Economy services around the world. The main contribution is to estimate new income elasticities for international trade in New Economy services and incorporate these in a simple model of the current accounts. Widespread uptake of New Economy services around the world improves the potential for a sustainable US external balance through two channels. First, uptake of New Economy services raises global growth. Second, it narrows the asymmetry in income elasticity of US trade. But, reasonable estimates of these two structural improvements are not sufficient to stabilize the US current account deficit.
Author: Catherine L. Mann
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2046568898