|
|
|
|
The National Interest
Fall 2005 Asia Supplement: Asia's Slow Growth Traps
by Clark Johnson
The U.S. trade deficit currently runs at the unusually high level of 5 percent of GDP, and something like 80 percent of the net deficit has recently been funded not by private capital flows, but by foreign central bank purchases of dollars. U.S. net international indebtedness, which summed to less than 10 percent of GDP in 1998 or 1999, now exceeds 25 percent of GDP and continues to grow. In late 2004 and early 2005 it became commonplace to anticipate that the dollar would plunge and interest rates would rise. Such prestigious figures as Paul Volcker and Joseph Stiglitz have predicted that a dollar crisis is likely.
Full Text (PDF, 7 pages, 87.5 KB)