Current account
MacroDefinition
Trade balance + net income from abroad + net unilateral transfers. Broader measure of a country's net position with the rest of the world. US runs a chronic ~3% of GDP current account deficit, financed by foreign capital inflows.
A 5%+ current account deficit historically signals stress in non-reserve-currency countries (Mexico 1994, Asia 1997, Iceland 2008). The US can run higher deficits because of dollar privilege.
A 5%+ current account deficit historically signals stress in non-reserve-currency countries (Mexico 1994, Asia 1997, Iceland 2008). The US can run higher deficits because of dollar privilege.
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