Rato's statements we must recall that there are several different approaches to characterizing the current account balance. In this analysis we will focus on two; the current account balance defined as the difference between a nation's saving and its investment, and the current account balance defined as the difference between a nation's exports and its imports...
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Rato's call for "bold action" to stabilize the U.S. current account deficit, we see that an increase in taxes will affect the government budget. By looking at the accounting identity which relates the current account and the government budget we see that CA= Sp ? Ip + (T-Cg-Ig), where the government budget is equal to T-Cg-Ig...
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