Coping with the Inevitable Adjustment in the US Current Account

In recent years the US current account deficit has grown to the point that most observers consider its level to be already unsustainable. Yet it seems set to continue to increase in the foreseeable future, with net foreign debt likely to surge. This paper describes the present deficit from three points of view: imbalances of imports over exports of goods, services and income; of inflows over outflows of capital; and of investment and spending over savings and income in the domestic economy. It then examines the possible causal factors for these disequilibria and goes on to describe the arguments for both optimistic and pessimistic views as to their unwinding over time. Last, it suggests a number of policy conclusions as to how the US authorities should factor the presence of the deficit into their decision-making, even though they rightly do not view it as a target outcome. The bottom line is that the importance of avoiding disincentives to save and of maintaining as much flexibility as possible in the economy is reinforced by the risks posed by the deficit. This Working Paper relates to the 2005 OECD Economic Survey of the United States (www.oecd.org/eco/surveys/us). Faire face a l'inevitable ajustement de la balance courante aux Etats-Unis Ces dernieres annees, le deficit de la balance courante des Etats-Unis s’est creuse a un point tel que la plupart des observateurs jugent son niveau deja insoutenable. Pourtant, il semble devoir continuer de croitre dans l’avenir previsible, tandis que la dette exterieure nette devrait augmenter fortement. Ce papier decrit le deficit actuel sous trois angles : le desequilibre entre les importations et les exportations de marchandises, de services et de revenus ; le desequilibre entre les entrees et les sorties de capitaux ; enfin, dans l’economie interieure, le desequilibre entre l’investissement et la depense, d’une part, et l’epargne et le revenu, d’autre part. Il examine ensuite les causes possibles de ces desequilibres puis expose les arguments sur lesquels se fondent les evaluations optimistes ou pessimistes concernant leur resorption a terme. Enfin, ce chapitre presente un certain nombre de conclusions sur la facon dont les autorites des Etats-Unis devraient integrer le deficit dans leur processus de prise de decision, meme si, a juste titre, elles n’en font pas un objectif de resultat. En fin de compte, les risques poses par le deficit soulignent la necessite d’eviter les desincitations a epargner et de maintenir un maximum de flexibilite dans l’economie Ce document de travail se rapporte a l'Etude economique de l'OCDE des Etats-Unis 2005 (www.oecd.org/eco/etudes/us).