Journal of Economic Literature
Book Reviews
2026-09-01
Catherine L. Mann of Brandeis University reviews “Untangling the US Deficit: Evaluating Causes, Cures and Global Imbalances” by Richard A. Iley, Mervyn K. Lewis,. The EconLit Abstract of the reviewed work begins “Considers the nature of the U.S. current account deficit, focusing on its possible causes and the severity of its consequences. Considers the causes of the U.S. current account deficit, discussing the trade balance view, the absorption view, the savings and investment view, and the portfolio balance view. Examines the international dimension and the “global savings glut” view of the deficit. Explores the nature of the adjustment mechanisms to payments imbalances in the context of a world system of independent currencies and “international financial laissez-faire.” Presents alternative scenarios of the extent and sustainability of the U.S. current account position. Considers the demand for U.S. assets and the main sources of capital flows to the United States over the last decade. Analyzes the China-United States relationship and its connection with the U.S. trade deficit. Iley is Senior Economist with BNP Paribas. Lewis is Professor of Banking and Finance at the University of South Australia and Fellow of the Academy of Social Sciences. Index.”