Viewing the Current Account Deficit as a Capital Inflow
6 Pages Posted: 28 Jun 2007
Date Written: December 1998
With the 1998 current account deficit approaching $225 billion, attention is again focusing on the deficit's impact on U.S. jobs. Although a high deficit does adversely affect employment in export- and import-competing industries, it also means that considerable foreign capital is flowing into the United States, supporting domestic investment spending that stimulates growth and creates jobs.
Keywords: current account, capital flows, employment growth
JEL Classification: F32, F41, F14
Suggested Citation: Suggested Citation