Viewing the Current Account Deficit as a Capital Inflow

6 Pages Posted: 28 Jun 2007

See all articles by Matthew Higgins

Matthew Higgins

Federal Reserve Bank of New York

Thomas Klitgaard

Federal Reserve Bank of New York

Date Written: December 1998

Abstract

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

Higgins, Matthew and Klitgaard, Thomas, Viewing the Current Account Deficit as a Capital Inflow (December 1998). Current Issues in Economics and Finance Vol. 4, No. 13, December 1998. Available at SSRN: https://ssrn.com/abstract=997029 or http://dx.doi.org/10.2139/ssrn.997029

Matthew Higgins

Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States

Thomas Klitgaard (Contact Author)

Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States

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