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The US economy: an update

Author

Listed:
  • Ugo Sacchetti

    (Wilmington, N.C. (USA))

Abstract
This article updates one of four trends in the US economy which were highlighted in a previous paper "Whither the US economy" published in 1999 in this Review. It focuses on the developments in the external accounts. In addition to showing a rapid increase in the negative US current account balance, the article stresses the importance of two new developments which have acquired increasing prominence: the accumulation of large foreign exchange reserves, mainly in US dollars, by other countries especially in Asia and the accumulation by those countries of large amounts of US Treasury securities. The resulting new situation has serious potential worldwide repercussions should those countries decide to diversify their reserves and to reduce their holdings of US securities. These prospects call for solutions with global participation, and which are much broader in scope, including structural changes, than mere readjustments of exchange rates between the US dollar and the currencies of the main surplus countries.

Suggested Citation

  • Ugo Sacchetti, 2005. "The US economy: an update," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 58(232), pages 3-20.
    • Handle: RePEc:psl:bnlaqr:2005:11
    as

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    File URL: http://ojs.uniroma1.it/index.php/PSLQuarterlyReview/article/view/9834/9719
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    References listed on IDEAS

    as
    1. Wynne Godley & Alex Izurieta, 2004. "The US economy: weakness of the "strong" recovery," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 57(229), pages 131-139.
    2. U. Sacchetti, 1999. "Whither the US economy?," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 52(208), pages 69-94.
    3. Wynne Godley & Alex Izurieta, 2004. "The US economy: weakness of the "strong" recovery," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 57(229), pages 131-139.
    4. U. Sacchetti, 1999. "Whither the US economy?," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 52(208), pages 69-94.
    5. Matthew Higgins & Thomas Klitgaard, 2004. "Reserve accumulation: implications for global capital flows and financial markets," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 10(Sep).
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    US economy; exchange reserves; exchange rates;
    All these keywords.

    JEL classification:

    • E66 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General Outlook and Conditions
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada

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