In 2004, the US current account defi cit widened to US $668.1 billion and 5.7 per cent of gross domestic product (GDP). These numbers, unprecedented both in absoluteand relative terms, have led many observers to doubt the stability of the status quo. To avoid a major crisis resulting from a disorderly adjustment, questions must be answered concerning appropriate policy initiatives to ensure a more benign correction of external imbalances.
Full article available only as PDF