This article argues that Australia's savings behaviour relative to its investment opportunities ensures a structural current account deficit which is fundamentally sustainable. In fact considerable scope seems to exist for it to widen further, irrespective of fiscal tightening that has occurred...

This paper re-examines the relationship between fiscal imbalances and net foreign borrowing. A general analytical approach is first developed which suggests that, other things equal, a rise (fall) in any advanced economy’s fiscal deficit should be fully matched by a rise (fall) in its net...

This paper evaluates China's exchange rate policy and current account surplus in the context of its rapid development. Recognizing that external imbalances reflect divergent national production and expenditure growth within both China and its trading partners, it contends that yuan exchange rate...

New Zealand's persistent current account deficits and high external debt level remain central to ongoing economic policy debate. However, what is often overlooked is the potentially positive macroeconomic contribution made by foreign finance. This paper suggests that foreign capital inflows, the...

This paper models the open economy macroeconomics of international capital rankest integration from an absorption-Fisherian perspective. Though eliminating indirect and direst foreign investment barriers widens current and capital account imbalances, such imbalances should not, of themselves, be...

This paper identifies foreign investment, broadly defined, as an additional source of income growth for open trading economies under conditions where physical capital is free to cross country borders. By extending the precepts of neoclassical theory, it shows how current account imbalances...

New Zealand’s unrelenting current account deficits, its trade performance and high external debt level remain central to ongoing economic policy debates. However, what has been overlooked in the discussion of New Zealand’s economic relations with its trading partners is the positive...

Large current account deficits and foreign debt levels remain a source of concern for international financial markets and policymakers. Yet, exactly what an "excessive" external deficit or liability position for an advanced economy is at any time has never been adequately defined. This article...