Premium
COMMENTS ON ‘THE GLOBAL IMBALANCES: WHAT IS THE PROBLEM?’, THE 2007 WINCOTT LECTURE, GIVEN BY MAX CORDEN
Author(s) -
Wolf Martin
Publication year - 2008
Publication title -
economic affairs
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.24
H-Index - 18
eISSN - 1468-0270
pISSN - 0265-0665
DOI - 10.1111/j.1468-0270.2008.00825.x
Subject(s) - depreciation (economics) , liberian dollar , economics , swift , inflation (cosmology) , proposition , value (mathematics) , monetary economics , government (linguistics) , present value , keynesian economics , financial economics , neoclassical economics , finance , mathematics , philosophy , profit (economics) , statistics , physics , linguistics , epistemology , financial capital , theoretical physics , computer science , capital formation , programming language
The view that the United States will be able to run significant deficits for a long time is convincing. However, the proposition that it makes sense for foreigners to invest in the USA because of the high returns is questionable. The value of their US assets is at risk from dollar depreciation, inflation and government sequestration. Accordingly, there is a danger that foreign investors will cut and run, causing a brutal and swift adjustment.