On the international balance of payments current account deficit implies that imports of goods and services than exports value. Currently, the U.S. has a very high current account deficit, roughly 6-7% of gross domestic product. This deficit may cause the U.S. dollar depreciated significantly. And the international balance of payments deficit, the reasons for this transaction.
A fixed exchange rate
When the currency was overvalued, imports will become cheaper, so it isOne of imports of high-Q. Exports will be quite competitive, so will appear in the reduction in export volume.
Growth
If the increase in an increase in advertising, people's income, provide the public with more disposable income, consumption. If the domestic producers of unfair treatment of domestic advertising, consumers must be of imports of goods are abroad. In the UK, we have a high marginal MPM imports, because we do not have a comparative advantageProduction of industrial products. Therefore, if there is faster economic growth is often a substantial increase in imports.
Decline in competitiveness.
In the UK there is a decline in manufacturing exports, and because she has been working to developing countries in the Far East to compete. This has led to sustained deficit in the trade balance.
Higher inflation
This makes the decline in export competitiveness, imports more competitive.However, this factor may be offset by the depreciation in the pound.
In other countries the economic downturn.
If Britain's major trading partners experience negative economic growth, then they will buy our exports, the current account deterioration.
Borrow
If countries borrow money to invest, such as the Third World countries,
In the U.S., the current account deficit is mainly due to consumption of high-margin U.S.消费者. This was suggested by relatively low interest rates, reduction of income taxes of the rich and real estate prices. The decline in housing prices in the United States, so consumer spending may reduce the deficit.
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