1980s Imbalances
This country ran the largest current‑account deficit of the 1980s, reaching about $150 billion by 1987.
What is the United States?
The Plaza Accord was signed in this year.
What is 1985?
The Louvre Accord was signed in this European capital.
What is Paris?
By 2006, the U.S. current‑account deficit exceeded this amount.
What is $800 billion?
Germany and Japan resisted U.S. pressure to adopt this type of fiscal policy.
What is expansionary fiscal policy?
These two countries ran the major surpluses that offset the U.S. deficit during the decade.
What is Japan and Germany?
The G5 agreed to reduce the value of this currency by 10–12%.
What is the U.S. dollar?
The Accord marked a shift from depreciation to this exchange‑rate goal.
What is stabilization?
This country became the largest supplier of credit to the United States.
What is China?
This German institution refused to loosen monetary policy due to inflation concerns.
What is the Bundesbank?
The Reagan administration’s combination of tax cuts and increased military spending produced this domestic imbalance that fueled imports.
What is a large budget deficit?
These three countries each financed 25% of the $18 billion intervention fund.
What are the United States, Germany, and Japan?
This proposed system would have created wide fixed‑but‑adjustable exchange‑rate bands.
What are target zones?
East Asian economies began running large surpluses after this 1997 event.
What is the Asian financial crisis?
Japan’s ruling party resisted fiscal expansion because it prioritized this goal.
What is fiscal consolidation?
This U.S. institution pushed the administration toward international cooperation by threatening protectionist legislation.
What is Congress?
The Accord aimed to correct these large international economic gaps.
What are current‑account imbalances?
By early 1987, the dollar had fallen nearly this percentage from its peak.
What is 40 percent?
China accumulated more than this amount in dollar reserves.
What is $2 trillion?
Germany argued that this U.S. domestic imbalance—not German policy—caused the U.S. trade deficit.
What is the U.S. budget deficit?
By 1984, the U.S. shifted from net creditor to this status.
What is a net international debtor?
This U.S. Treasury Secretary initiated the negotiations.
Who is James A. Baker III?
This country’s central bank raised interest rates shortly after the Accord, angering the U.S.
What is Germany (the Bundesbank)?
Despite heavy borrowing, this U.S. metric surprisingly stabilized after 2004.
What is the U.S. international investment position?
This 1987 U.S. law placed the federal budget on a deficit‑reduction path.
What is the Gramm‑Rudman‑Hollings Act?