It seems unlikely, therefore, that changes in the U.S. government budget position can entirely explain the behavior of the U.S. current account over the past decade. The Changing Pattern of International Capital Flows and the Global Saving Glut What then accounts for the rapid increase in the U.S. current account deficit?
As you will recall, 2002 started out on a promising note, but the momentum of global growth waned in the second half of the year. A return to firmer growth was expected early in 2003, but observers watching for signs of that quickly found the picture clouded by concerns about the growing likelihood of war in Iraq, and then its actual occurrence.