The debt crises of the 1980s in Latin America and in the Eurozone recently reaffirmed the commonsense idea that countries cannot run huge current account deficits or finance them for ever. The United States, however, has run such a deficit for almost twenty years and a sizable net debtor position for about the same number of years. Develop and try to explain the sources of the discrepancy.

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The US Current Account Deficit Discrepancy amid Debt Concerns Its true that the seemingly unsustainable current account deficit CAD of the US contrast... View the full answer