A DIFFERENT VIEW
Economist Stephen Roach of Morgan Stanley puts some interesting perspective around the on-going raging debate over the US trade deficit and it's global economic implications. He says:
"In 2005, our estimates suggest that the US will account for fully 70% of all the current account deficits in the world economy. That's more than double America's 28% share in world GDP as measured at market exchange rates and more than three times the US weight of 21% as gauged by the IMF's purchasing power parity metrics.
By contrast, Japan's surplus--the world's biggest--accounts for only 17% of all the current account surpluses in the world.
In fact, it takes ten economies--Japan, Germany, Russia, Saudi Arabia, China, Norway, Switzerland, Canada, Singapore, and the Netherlands--to make up the same 70% share on the surplus side of the equation that America accounts for on the deficit side."
He goes on to add:
"In my view, there can be no mistaking the highly disproportionate share that America plays in fostering overall imbalances in the global economy."
The full piece is worth reading, regardless of whether you agree or disagree with Stephen's conclusions, especially given the additional context of the looming Katrina and Rita bills. Recommended.
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