An influential explanation for the recent rise in the U.S. current account deficit is the boom in U.S. productivity. As U.S. productivity surged in the mid-1990s, capital was attracted to the U.S. to take advantage of the higher real returns. Using a two country general equilibrium model, this...

Does increased international liquidity, the saving glut explain the recent deterioration of US current account balances? In this paper, we develop a simple, two country real business cycle model to answer this question. The salient feature of our model is that lending by one country is...

An influential explanation for the recent rise in the U.S. current account deficit is the boom in U.S. productivity. As U.S. productivity surged, capital was attracted to the U.S. to take advantage of the higher real returns. Using a two country general equilibrium model, this paper...

The empirical literature examining aggregate data has generally found small or insignificant effects of exchange rate fluctuations on export volumes. This lack of association between real quantities, such as export volumes and the exchange rate is the so-called "exchange rate disconnect puzzle."...