Research On The Sustainability Of US Current Account Deficits:Analysis Of The Intertemporal Budget Constraints

U.S. current account deficits are important parts of global imbalance. Over the past three decades, the U.S. current account deficits have been the maintaining power and strength of global economic prosperity. However, the fact that the deficits increased rapidly in recent years have sparked scholars’ concerns about the sustainability of the deficits as well as the global prosperity. This article views from the ultimately balance of private sector and government sector’s intertemporal budget constraints, using time series methods to examine the sustainability of U.S current account deficits. It can be concluded that in the past three decades, the U.S. current account deficits are sustainable.