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Session 7: Capital Inflows and the Trade Deficit: Measurement and Implications of Global Imbalances
How much does the US depend on foreign capital, and how sustainable is it? Some $7 billion each day, accumulating to about $2.7 trillion dollars in external obligations to the rest of the world? Or, are international capital flows measured so poorly that the US has almost no external debt at all? The currency composition of international capital flows also matters quite a bit for the exposure of the U.S. economy to international indebtedness. This session will present these alternative views and debate their implications.
Presentations
Cedric Tille: Borrowing Without Debt? Interpreting the U.S. International Position
Brian Garvey: "Flows, Fallacies, and Facts: Caveats and Pitfalls in Capital Account Analysis"
Links of Interest
Catherine Mann's home page at the Institute for International Economics
FRB of New York's Global Economy page
Office of Management and Budget
Speakers
Catherine L. Mann
Senior Fellow
Institute for International Economics
Catherine L. Mann has been a senior fellow at the Institute for International Economics since 1997. Previously, she served as assistant director of the International Finance Division at the Federal Reserve Board of Governors, senior international economist on the President's Council of Economic Advisers at the White House, and adviser to the chief economist at the World Bank.
Her current work focuses on the economic and policy issues of global information, communications, and technology, particularly with reference to the US economy, labor market, and international trade. Her recent Institute policy brief "Globalization of IT Services and White-Collar Jobs: The Next Wave of Productivity Growth" and forthcoming book High-tech and Globalization in America address these issues.
She is author or coauthor of two books that focus on the policy foundations for effective use of technology for domestic development and external competitiveness. APEC and the New Economy (2002) was presented to and endorsed by APEC Leaders at their meeting in Shanghai, China. Global Electronic Commerce: A Policy Primer (2000) uses general analysis and specific examples from field research in more than 10 countries to address how the Internet and electronic commerce affect policymaking, with particular focus on infrastructure and policy issues of taxation, privacy, security, intellectual property, and trade negotiations. In addition she directs a project funded by the Ford Foundation to support collaborative research comparing Asian and Latin American countries on how technology affects entrepreneurship, government, education and skills, and financial intermediation. She has delivered keynote speeches and engaged in projects on technology and policy in China, Thailand, Vietnam, Taiwan, Sri Lanka, Mexico, Morocco, Tunisia, South Africa, as well as in Australia, Canada, Finland, Germany, and New Zealand.
She also studies broader issues of US trade, the sustainability of the current account, and the exchange value of the dollar. Published in 1999, Is the US Trade Deficit Sustainable? answers perennial questions about the impact of global integration on the US economy and the dollar. A Journal of Economic Perspectives (2002) article reviews concepts of sustainability, including the role of international financial markets and international trade in services, topics also addressed in "How Long the Strong Dollar?" in Dollar Overvaluation and the World Economy, edited by John Williamson and C. Fred Bergsten, and in "The US Current Account, New Economy Services, and Implications for Sustainability" in the Review of International Economics.
In addition to her work at the Institute, Mann taught for 10 years as adjunct professor of management at the Owen School of Management at Vanderbilt University and two years at the Johns Hopkins Nitze School for Advanced International Studies, among other university courses. She received her PhD in Economics from the Massachusetts Institute of Technology. Her undergraduate degree is from Harvard University.
Cedric Tille
Senior Economist
Federal Reserve Bank of New York
Cedric Tille is Senior Economist in the International Research Function at the Federal Reserve Bank of New York.
His fields of interest include Open economy monetary policy, International transmission mechanism, and Asset market integration.
Cedric Tille has written on several aspects of international macroeconomics, in particular on financial integration, the design of optimal policy, and the international transmission of policy actions. He holds a Ph.D. from Princeton University.
John Kitchen
Economist
Office of Management and Budget
John Kitchen is an economist with the Office of Economic Policy of the Office of Management and Budget, Executive Office of the President. He recently served as Chief Economist of the House Budget Committee, and previously held positions in the Department of the Treasury, the Council of Economic Advisers, the Economic Research Service, and Washington and Jefferson College.
Dr. Kitchen received his Ph.D. and M.A. in economics from the University of Pittsburgh and his B.A. in economics and history from the College of William and Mary in Virginia. His research interests include macroeconomic forecasting, Federal budget and taxes, international macroeconomics, and the effects of U.S. monetary and fiscal policies in domestic and international financial markets. His research has been published in a variety of journals including Business Economics; the National Tax Journal; the Journal of International Money and Finance; and the Journal of Money, Credit and Banking.
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