Logical Analysis Report
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
DOLLARAMERICAGDPHigh Level Abstractions
DOLLAR(2, 0 Order)( DOLLAR )(2, 0 Order) topAMERICA(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) topGDP(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) topReferences- ( 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