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Since Japan and the rest of Asia account for 30% of world trade, competitive devaluations across the region would also transmit deflationary pressures to America and Europe.
ECONOMIST: Can a cheaper yen rid Japan of deflation?
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The current-account deficit, now around 5% of GDP, is a key factor: if capital flows into America slowed even more sharply, or dried up, the adjustment involved in reducing the current-account deficit could be painful both for America and the rest of the world.
ECONOMIST: Time for a rethink | The
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Labour's Andrew Dismore, chairman of Parliament's Committee on Human Rights, suggested it was "time the rest of the world turned their back on the Sri Lankan government, isolated them and held them to account".
BBC: Sri Lanka warned on 'war crimes'
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One big difference is that in the 1960s the United States ran a current-account surplus and was a net creditor to the rest of the world.
ECONOMIST: A further steep decline in the dollar seems inevitable
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The large deficit in the U.S. current account -- the broadest measure of American trade with the rest of the world -- is also a cause for concern.
CNN: IMF: U.S. needs to balance budget
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China's trade surplus with America remains large and controversial, but its current-account surplus with the rest of the world is dying out.
ECONOMIST: Exports
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And, unlike America, they are not running a current account deficit with the rest of the world: they are paying their way in the global economy.
BBC: Central banks and the 'spirit of 2008'
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The imperatives of current account surpluses or fiscal responsibility are apparently not quite so pressing when the rest of the world is prepared to lend you what you need in your currency.
FORBES: Foreign 'Currency Manipulation' Does Not Warrant Washington's Attention
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Thankfully, Britain's borrowing from the rest of the world did not come close - Spain's current account deficit in 2007 was more than 5% of GDP, twice as large as Britain's.
BBC: Eurozone growth: Comparing the UK with Europe
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Its vast current-account deficit has started to shrink, meaning that America is no longer pulling along the rest of the world.
ECONOMIST: Recession in America