Study on Sustainability of American Double Gaps and its External Debt

The changes of a nation's external debt are the main external manifestations of economy, namely foreign trades and international capital flows. The sustainability of American external debt is, in a certain degree, determined by the continuous external imbalance in American economy. In essence, there is a close relationship between the aggravation of the external and internal imbalance in American economy. The empirical analysis shows that no matter how the USA's economic status is, the inter-conversion between fiscal gap and savings-investment gap of private sector result in the continuous expansion of American external debt and moreover ensure the sustainability of American external debt.