Conclusion So in conclusion, I am reminded of some sage advice from Hamlet: “there is nothing either good or bad, but thinking makes it so”. Current account deficits have a bad reputation, which is not always warranted. While some current account positions are the result of distortionary policies that should be redressed, others are not.
The examples I have discussed show that there are configurations of current account positions and capital flows that should not be a cause for concern. Indeed, in many cases, they are beneficial and facilitate a productive reallocation of global capital.