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Is a Brighter Future Waiting for the U.S. Current Account Balance

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  • Hehdi Hojjat

Abstract

This article uses cross sectional and times series data to forecast the U.S. current account balance and projects that the U.S. will have a surplus in that account in less than 10 years. This improvement will happen with the help of the energy sector; however, trade, service and income accounts will be also contributing. Both cross sectional and time series projections display a rather robust outlook for the U.S. current account balance. These predictions shatter many glooms and doom scenarios about the overreliance of America on Chinese capital to finance its deficit. By 2020, the U.S. could be in a position to actually finance the deficit of other countries.

Suggested Citation

  • Hehdi Hojjat, 2014. "Is a Brighter Future Waiting for the U.S. Current Account Balance," Global Journal of Business Research, The Institute for Business and Finance Research, vol. 9(5), pages 59-71.
    • Handle: RePEc:ibf:gjbres:v:8:y:2014:i:5:p:59-71
    as

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    References listed on IDEAS

    as
    1. Rafiq, Sohrab, 2010. "Fiscal stance, the current account and the real exchange rate: Some empirical estimates from a time-varying framework," Structural Change and Economic Dynamics, Elsevier, vol. 21(4), pages 276-290, November.
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    More about this item

    Keywords

    Current Account Balance; U.S. Trade Deficit; Balance of Payments; Cross Sectional Analysis of Trade Data;
    All these keywords.

    JEL classification:

    • M - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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