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Saving, Investment, and the Current Account

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The U.S. current account deficit requires an influx of foreign capital. In other words, we finance our surfeit of imports by giving foreigners claims on our future output. Persistent deficits have made us a debtor country since 1987. This year, the annual cost of servicing these debts has surpassed the income earned on all U.S. assets held abroad.

Suggested citation: “Saving, Investment, and the Current Account,” Federal Reserve Bank of Cleveland, Economic Trends, no. 97-12, pp. 18, 12.01.1997.

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