Whether the U.S. current account deficit is harmful or not to the U.S. economy depends on the assumptions we make about capital scarcity. In a world awash with excess capital and insufficient demand, the U.S. current account deficit is a drag on growth.
Rejecting the Trans-Pacific Partnership should not mean the rejection altogether by Washington of the very idea of a stable, rules-based trading system. The world is better off with such a regime.
A deep grounding in economic and financial history is important for modern economic analysis.
A slowing Chinese economy might be good or bad for the world, depending on domestic savings and domestic investment.
The role of the U.S. dollar as the world’s global reserve currency has been regarded as a great advantage to the United States but actually it is a destabilizing burden rather than an “exorbitant privilege.”
The next few years could see a break-up of the current monetary and trading regime and a U.S. turn inward toward isolation.