Linking saving ratios and current account balances
Differences in saving and investment ratios underpin the changes in both the size and distribution of current account balances of various economies worldwide, argues an article published by the Reserve Bank of Australia.
The article demonstrates that saving and investment ratios have been persistently higher in Asia than in the rest of the world, resulting in current account surpluses capable of negating deficits in other areas. The sharp downturn in economic activity is expected to cause a drop
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