2 Economic Perspectives. Introduction and summary

Transcription

1 2 Economic Perspectives Introduction and summary

2 International trade the current account and the capital account Federal Reserve Bank of Chicago 3

3 percent of GDP FIGURE 1 Imports, goods and services Exports, goods and services 0 Trade Economic Perspectives

4 Savings and investment im FIGURE 2 FIGURE 3 percent of GDP Income account percent of GDP 10 5 Change in U.S. foreign assets Change in U.S. foreign liabilities -2.5 Transfer Trade Current account Capital account Federal Reserve Bank of Chicago 5

5 Which hypothesis best fits the data? 6 Economic Perspectives

6 A. Large versus small country FIGURE 4 D. Consumption boom r S D (S D + S F ) Large r S D 1 + SF 0 S D 0 + SF 0 r 1 r = r* (S D + S F ) Small r 0 current account deficit 1 0 B. Safe haven E. Technology shock r S D 0 + SF 0 r S D + S F S D 0 + SF 1 r 0 r 1 r 1 r C. Capital outflow, small country F. Capital outflow, large country r r S D 0 + SF 1 risk premium r 1 r 0 S D 0 + SF 1 S D 0 + SF 0 risk premium r 1 r 0 S D 0 + SF Notes: r* = world interest rate; S D = domestic savings; S F = foreign savings; = investment. Federal Reserve Bank of Chicago 7

7 percent FIGURE 6 Broad consumer goods Capital goods and intermediaries Other Note: Broad consumer goods comprises consumer goods, foods, feeds and beverages, and automotive. percent of GDP FIGURE 5 Current account Gross national savings Gross domestic investment percent of GDP FIGURE 7 Airplanes, etc. Other Total capital goods Computers, etc Economic Perspectives

8 percent 85 FIGURE 8 percent 30 percent 10 FIGURE 9 80 Consumption (left axis) Investment (right axis) Source: Federal Reserve Board of Governors. What would an adjustment mean? Federal Reserve Bank of Chicago 9

9 BOX 1 10 Economic Perspectives

10 percent 100 FIGURE 10 FIGURE 11 Other inflows Stocks and bonds Other outstanding bonds 22% Stocks 28% 25 Direct investment Agency bonds 23% New corporate issues 27% percent of GDP FIGURE 12 Services Total Goods Federal Reserve Bank of Chicago 11

11 Conclusion 12 Economic Perspectives

12 Federal Reserve Bank of Chicago 13