AuthorTopic: Economics Question
StlTom
@2014-11-26 00:56:48
The following is taken from the notes on Study Session 4. "Therefore, higher economic growth causes a current account deficit. Similarly, a large current account surplus may be a bad signal because it may indicate that the economic growth of a country falls behind its trading partners."

The first statement is stated as irrefutable fact, but doesn't the example of China prove this incorrect? Almost seems like a wishful-thinking US-centric view on balance on payments economics...
kiwikai99
@2014-12-05 05:29:32
China's socialist government could be a valid argument that the CFA text is true.

The market would not adjust by itself with intervention by the government. This could mean that individuals are impeeded from making their intertemporal spending decisions, such as those implied in the CFA text.

What do you think?
ah64d1
@2015-01-02 13:53:33
Sure we see a lot of EA countries with high GDP growth rates, material CA surplus and no socialist/quasi-comunists in a driver seat.

CFA Discussion Topic: Economics Question

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I used your notes and passed ... highly recommended!
Lauren

Lauren