In the United States currency union, we seem never to worry if astate has a...
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Economics
In the United States currency union, we seem never to worry if astate has a big current account deficit. Have you ever seen suchdata in the newspaper? For example, one would guess that the stateof Louisiana ran large current account deficits after it wasdevastated by Hurricane Katrina in 2005. But Louisiana's currentaccount deficit was not deemed worthy of coverage by the financialpress. We do know, however, that in 2008, Greece had a currentaccount deficit of 14.6 percent of GDP, Portugal had a deficit of12 percent of GDP, and Spain had a deficit of 9.8 percent of GDP.Should the governments of these countries worry about these largedeficits? (Hint: Relate your answer to the debate over the need forthe SGP.)B. No.
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