This question requires that you obtain data from the Federal Reserve Economic Database (FRED) (http://research.stlouisfed.org/fred2/). On this page, you can locate GDP data and then import/export these data. View the current account.

a. Looking at the time series plot provided by FRED, what has happened to the U.S. current account over time? Compare the U.S. experience in the 1960s with that since 1990.

b. Looking at the current account identity, what are the possible sources of the dramatic change in the U.S. current account observed over the last 10 years?

c. In the figure, the recession dates are shaded. What happened to the U.S. current account during the last two U.S. recessions in 2001 and 2008–09? Looking at the current account identity, what are the possible reasons that the current account would behave this way during recessions?