VoxEU Video
Current account deficits: Knowing when to act
Current accounts deficits are driven by different variables, with a trade deficit being a major component. In this video, Kristin Forbes outlines a model to understand when deficits are worrying. When countries run current account deficits, we need to go beyond trade deficits and focus on financial channels and vulnerabilities. Deficits can be risky, but can also be risk-sharing. This video was recorded in March 2016 during the Royal Economic Society’s Annual Conference held at the University of Sussex.
