Key Focus

  • This raises one of the biggest questions of all: Will foreign investors demand concessions to provide the massive increment of foreign capital that America.s saving-short economy is about to require.
    The answer depends critically on whether the US deserves to retain its exorbitant privilege
  • That means today.s saving-short US economy could well be headed for a significant partial liquidation of net saving.
    With unprecedented pressure on domestic saving likely to magnify America.s need for surplus foreign capital, the current-account deficit should widen sharply


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High Level Topics

  • DOLLAR
  • AMERICA
  • GDP
  • High Level Abstractions

  • DOLLAR(2, 0 Order)
  • ( DOLLAR )(2, 0 Order)  top
  • AMERICA(5, 0 Order)
  • ( AMERICA )(5, 0 Order)  top
  • ( AMERICA, SAVING-SHORT )(2, 1st Order)  top
  • ( AMERICA, GDP )(1, 1st Order)  top
  • ( AMERICA, ECONOMY )(2, 1st Order)  top
  • ( AMERICA, DEFICIT )(1, 1st Order)  top
  • ( AMERICA, CAPITAL )(2, 1st Order)  top
  • ( AMERICA, RAZOR-THIN )(1, 1st Order)  top
  • ( AMERICA, POST-CRISIS )(1, 1st Order)  top
  • ( AMERICA, OPERATING )(1, 1st Order)  top
  • GDP(3, 0 Order)
  • ( GDP )(3, 0 Order)  top
  • ( GDP, SAVING-SHORT )(2, 1st Order)  top
  • ( GDP, FEDERAL )(2, 1st Order)  top
  • ( GDP, ECONOMY )(2, 1st Order)  top
  • ( GDP, DEFICIT )(1, 1st Order)  top
  • ( GDP, CAPITAL )(2, 1st Order)  top
  • ( GDP, BUDGET )(2, 1st Order)  top
  • ( GDP, US_CONGRESS )(1, 1st Order)  top
  • References

    • ( DOLLAR )  top
    • (Read more)   topThe COVID Shock to the Dollar Jun 23, 2020 STEPHEN S. ROACH No country can afford to squander its saving potential. ultimately, the seed-corn of long-term economic growth
    • (Read more)   topThe dollar.s real effective exchange rate fell by 33% between 1970 and 1978, by 33% from 1985 to 1988, and by 28% over the 2002-11 interval
    • ( AMERICA )  top
    • ( AMERICA, SAVING-SHORT )  top
    • (Read more)   topThat means today.s saving-short US economy could well be headed for a significant partial liquidation of net saving.
      With unprecedented pressure on domestic saving likely to magnify America.s need for surplus foreign capital, the current-account deficit should widen sharply
    • (Read more)   top This raises one of the biggest questions of all: Will foreign investors demand concessions to provide the massive increment of foreign capital that America.s saving-short economy is about to require.
      The answer depends critically on whether the US deserves to retain its exorbitant privilege
    • ( AMERICA, GDP )  top
    • (Read more)   top ... unprecedented pressure on domestic saving likely to magnify America.s need for surplus foreign capital, the current-account deficit should widen sharply. Since 1982, this broad measure of the external balance has recorded deficits averaging 2.7% of GDP; looking ahead, the previous record deficit of 6.3% of GDP in the fourth quarter of 2005 could be eclipsed.
    • ( AMERICA, ECONOMY )  top
    • (Read more)   topThat means today.s saving-short US economy could well be headed for a significant partial liquidation of net saving.
      With unprecedented pressure on domestic saving likely to magnify America.s need for surplus foreign capital, the current-account deficit should widen sharply
    • (Read more)   top This raises one of the biggest questions of all: Will foreign investors demand concessions to provide the massive increment of foreign capital that America.s saving-short economy is about to require.
      The answer depends critically on whether the US deserves to retain its exorbitant privilege
    • ( AMERICA, DEFICIT )  top
    • (Read more)   top.s need for surplus foreign capital, the current-account deficit should widen sharply. Since 1982, this broad measure of the external balance has recorded deficits averaging 2.7% of GDP; looking ahead, the previous record deficit of 6.3% of GDP in the fourth quarter of 2005 could be eclipsed
    • ( AMERICA, CAPITAL )  top
    • (Read more)   top.s need for surplus foreign capital, the current-account deficit should widen sharply. Since 1982, this broad measure of the external balance has recorded deficits averaging 2.7% of GDP; looking ahead, the previous record deficit of 6.3% of GDP in the fourth quarter of 2005 could...
    • (Read more)   top This raises one of the biggest questions of all: Will foreign investors demand concessions to provide the massive increment of foreign capital that America.s saving-short economy is about to require.
      The answer depends critically on whether the US deserves to retain its exorbitant privilege
    • ( AMERICA, RAZOR-THIN )  top
    • (Read more)   top The COVID-19 crisis is an especially tough blow for a country that has long been operating on a razor-thin margin of subpar saving.
      Heading into the pandemic, America.s net domestic saving rate. the combined depreciation-adjusted saving of households, businesses, and the government sector
    • ( AMERICA, POST-CRISIS )  top
    • (Read more)   topstood at just 1.4% of national income, falling back to the post-crisis low of late 2011. No need to worry, goes the conventional excuse. America never saves.
      Think again. The net national saving rate averaged 7% over the 45-year period from 1960 to 2005
    • ( AMERICA, OPERATING )  top
    • (Read more)   top The COVID-19 crisis is an especially tough blow for a country that has long been operating on a razor-thin margin of subpar saving.
      Heading into the pandemic, America.s net domestic saving rate. the combined depreciation-adjusted saving of households, businesses, and the government sector
    • ( GDP )  top
    • ( GDP, SAVING-SHORT )  top
    • (Read more)   topSee ( AMERICA , SAVING-SHORT )
    • ( GDP, FEDERAL )  top
    • (Read more)   top. The Congressional Budget Office expects unprecedented federal budget deficits averaging 14% of GDP over 2020-21. And, notwithstanding contentious political debate, additional fiscal measures are quite likely
    • (Read more)   top This has happened only once before: during and immediately after the 2008-09 global financial crisis, when net national saving averaged -1.8% of national income from the second quarter of 2008 to the second quarter of 2010, while federal budget deficits averaged 10% of GDP.
      In the COVID-19 era, the net national saving rate could well plunge as low as -5% to -10% over the next 2-3 years
    • ( GDP, ECONOMY )  top
    • (Read more)   topSee ( AMERICA , ECONOMY )
    • ( GDP, DEFICIT )  top
    • (Read more)   topSee ( AMERICA , DEFICIT )
    • ( GDP, CAPITAL )  top
    • (Read more)   topSee ( AMERICA , CAPITAL )
    • ( GDP, BUDGET )  top
    • (Read more)   top. The Congressional Budget Office expects unprecedented federal budget deficits averaging 14% of GDP over 2020-21. And, notwithstanding contentious political debate, additional fiscal measures are quite likely
    • (Read more)   top This has happened only once before: during and immediately after the 2008-09 global financial crisis, when net national saving averaged -1.8% of national income from the second quarter of 2008 to the second quarter of 2010, while federal budget deficits averaged 10% of GDP.
      In the COVID-19 era, the net national saving rate could well plunge as low as -5% to -10% over the next 2-3 years
    • ( GDP, US_CONGRESS )  top
    • (Read more)   top
      The US Congress has moved with uncharacteristic speed to provide relief amid a record-setting economic free-fall. The Congressional Budget Office expects unprecedented federal budget deficits averaging 14% of GDP over 2020-21