Policy Issues and Conclusion
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As highlighted in Chapter 1, the global phenomenon of the widening of external account imbalances, particularly from the early 1980s, was usually interpreted in negative terms. For many nations with external deficits, such as Australia, Canada, Britain and the United States, imports were often popularly considered to have been too high relative to exports, gross national expenditure too high relative to gross national product, and domestic saving too low relative to investment. For surplus countries, such as Japan, exports, GDP and saving were deemed too high relative to imports, expenditure and investment. Such views reflect the different ways of presenting the external imbalance as set out in the international macroeconomic accounting framework of Chapter 2.
KeywordsForeign Investment Capital Mobility Capital Inflow External Debt Current Account Deficit
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