Blanchard, Olivier J.; Giavazzi, Francesco; Sá, Filipa - 2021
There are two main forces behind the large U.S. current account deficits. First, an increase in the U.S. demand for … current account deficits since the mid--1990s. This increase has been accompanied by a real dollar appreciation until late … to explore these issues. Our theoretical contribution is to develop a simple portfolio model of exchange rate and current …