NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

NBER Publications by Caroline Freund

Contact and additional information for this authorAll publicationsWorking Papers only

Working Papers and Chapters

March 2010The Anatomy of China's Export Growth
with Mary Amiti
in China's Growing Role in World Trade, Robert C. Feenstra and Shang-Jin Wei, editors
May 2007Current Account Deficits in Industrial Countries: The Bigger They Are, The Harder They Fall?
with Frank Warnock
in G7 Current Account Imbalances: Sustainability and Adjustment, Richard H. Clarida, editor
December 2005Current Account Deficits in Industrial Countries: The Bigger They are, the Harder They Fall?
with Frank Warnock: w11823
There are a number of worrisome features of the U.S. current account deficit. In particular, its size and persistence, the extent to which it is financing consumption as opposed to investment, and the reliance on debt inflows raise concerns about the likelihood of a sharp adjustment. We examine episodes of current account adjustment in industrial countries to assess the validity of these concerns. Our main findings are (i) larger deficits take longer to adjust and are associated with significantly slower income growth (relative to trend) during the current account recovery than smaller deficits, (ii) consumption-driven current account deficits involve significantly larger depreciations than deficits financing investment, and (iii) there is little evidence that deficits in economies that ru...

Contact and additional information for this authorAll publicationsWorking Papers only

 
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