9. Many economists put part of the blame for the persistent U.S. current account deficit of the...

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9. Many economists put part of the blame for the persistent U.S. current account deficit of the late 1980s on the apparently small size of the relative price change between U.S. imports and exports. The first Case Study in Chapter 12, however, linked the slow current account adjustment to private and government saving behavior. Try to give a unified account of the current account data, reconciling both price and expenditure effects.

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International Economics Theory And Policy

ISBN: 9780321116399

6th Edition

Authors: Paul R. Krugman, Maurice Obstfeld, Marc Melitz

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