Causes of current account deficits
United States has experienced constant current account deficits since early 1980s. List some of the major causes of the deficits? What could be the consequences of these constant U.S. current account deficits?
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Current account deficits of the U.S. have reflected a few reasons for example:
a) Historically high rate of real interest in the U.S. that is the result of ballooning federal budget deficits, which has kept dollar strong, and
b) Weak competitiveness of U.S. industries.
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