Research On The Impact Of America Consumption-Investment And Savings-Investment Internal Imbalance On Trade Deficits

In recent years, under the background that the economic and financial crisis around the world and the Imbalanced World Economy, as the flashpoint of global economic and financial crisis and as the main deficit side of global economic imbalances,the United States has aroused wide concern.First of all,Compared with the Ciannelli standards, we have made a preliminary assessment of the rationality of the ratio of consumption-investment and savings-investment in the current situation. Our research shows that the structural imbalance of the United States indeed exits in internal over-consumption and low-investment, low-savings.Then, according to the Alexander's absorption theory and Ciannelli's two gaps model, this paper attempts to analys the Internal imbalance have an impact on the unfavorable trade balance from the imbalance between consumption and investment-savings imbalance. According to the classical"Two Gaps Model", A country's external imbalances should be the performance of the country's savings-investment imbalance, but different from other countries,the imbalance of savings-investment is not serious, on the contrary the consumption-investment imbalance is serious. This is because of the led status of U.S. as the international monetary, that is, the United States external imbalance is the results of the combined effects of the savings-investment imbalance and consumption-investment imbalance.Based on the analysis about previous chapters, we use the extended"Two Gaps Model"to test the the relationships of external imbalance and internal imbalance in the U.S..The result of the empirical test is that the consumption-investment gap and savings-investment gap are the reasons of the US trade deficits.At the end of the paper, we get the conclusion that the Internal imbalances is the reason of the external imbalances in the U.S.,especially the over consumption led to the US trade deficits.With the background of the Imbalanced World Economy, we made some policy recommendations to improve the current difficult situation to try to have clear impression on which led to the US trade deficits and the global economic problems that we faced.