•  As the hype in the “new economy” and the expansionary monetary (and fiscal) stance sustained US domestic demand, they contributed to an unsustainable widening of the external imbalance, compensated by an imbalance of opposite sign that progressively grew in the external positions of major emerging economies.
The US current account deficit deteriorated from around 2 percent of GDP in mid-1996 − close to its historical average over the previous twenty years − to almost 6 percent in 2006.