A large US current account deficit is normal

The recent decades have seen a steady decline of the net financial asset position of the United States. As of 2006, the current account deficit of the US amounts to 1.6% of world GDP, US net foreign asset correspond to -5% of world GDP. Mostly everyone sees that as a huge problem and a sign the US is on the decline.Enrique G. Mendoza, Vincenzo Quadrini and José-Víctor Ríos-Rull argue that this is