Deficit (95 points)
In Chapter 10, Carbaugh Asks, “Can the United States Continue to Run Current Account Deficits Indefinitely?” Since in the long term, the obvious answer is no, perhaps the question should be rephrased to ask the following:
- Does the United States’ unique position in the world economy allow the country to safely run persistent external deficits?
- Can persistent U.S. deficits in the current and payments accounts be adjusted without bringing about economic recession or crisis?
In a 4-6 page (12-point font, double-spaced) essay, summarize and critically evaluate the main positions provided on this in Carbaugh’s Chapter 10 and the Deutsche Bank Research piece also assigned as reading for this module.