FINC495 Week 1 Discussion 2

Over the past 30 years, the US has existed in a situation of constant current account deficits while Japan has had nothing but current account surpluses over that same time period. The book suggests that current account deficits have a detrimental effect on a country’s wealth while surpluses have a positive effect. Over most of the same time period, the US economy has experienced massive expansion, while the Japanese economy’s performance has been lackluster. How do you reconcile these seemingly contradictory facts? What are the primary causes of the US deficits and the Japanese surpluses?

ANSWER WILL BE SENT ON EMAIL.