Abstract

The caselet presents the influence of the US economy on global economic growth. It traces out the reasons for the trade and budget deficits of the US. The caselet depicts the threat to the global economy due to the depreciation of the US dollar against other currencies. It gives the opinions of economists and analysts on ways in which the US can reduce trade deficits.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Trade and budget deficits of the US
• Reasons for the all-time high trade and budget deficits of the US
• US trade deficit and threats to the global economy
• Excessive borrowing by the US from foreign nations and its impact on the global economy
• and Impact of depreciating dollar on the incomes of various countries of the world.

Keywords

Global economic growth, US economy, Chinese economy, terrorist attacks, World Trade Center, foreign central banks, current account deficit (CAD), International Monetary Fund (IMF), European imports, European exporters, oil producing countries, Bank of International Settlements, trade deficit, trade barriers, free trade, domestic savings, yuan (Chinese currency)