Has International Trade in Saving Improved US Economic Welfare?

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Title Has International Trade in Saving Improved US Economic Welfare?
Author Makin, Anthony John; Narayan, Paresh Kumar
Journal Name The Economic Record
Editor Professor Paul Miller
Year Published 2009
Place of publication Australia
Publisher Wiley-Blackwell Publishing Asia
Abstract Over the past decade international policy-makers have perceived the current account deficit of the world's largest foreign borrower economy, the United States, as a threat to global economic and financial stability. Yet, by bridging the US domestic saving-investment gap, capital inflow that matched the huge US current account deficit also enabled a faster rate of domestic capital accumulation than home saving alone would have permitted. Consistent with the theory of international capital movements, this study identifies and compares the respective contributions of domestic and foreign saving to US gross domestic product per worker over the two decades prior to the onset of the US banking crisis. By revealing that foreign borrowing contributed significantly to raising US output and hence living standards over this period, it adds a new dimension to the debate about global imbalances.
Peer Reviewed Yes
Published Yes
Publisher URI http://www.wiley.com/bw/permis.asp?ref=0013-0249&site=1
Alternative URI http://dx.doi.org/10.1111/j.1475-4932.2009.00583.x
Volume 85
Issue Number Special Issue
Page from S2
Page to S9
ISSN 0013-0249
Date Accessioned 2009-11-18
Language en_AU
Faculty Griffith Business School
Subject International Economics and International Finance
URI http://hdl.handle.net/10072/29519
Publication Type Journal Articles (Refereed Article)
Publication Type Code c1

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