DOI: 10.36347/sjebm.2015.v02i02.005

Pages: 174-181

This research paper builds upon an earlier article by the author (Hojjat, 2014)[1] that used cross sectional and times series data to forecast the U.S. current account balance. This article projects the U.S. capital and financial account by using cross sectional and time series data and reaches the conclusion that the surplus in the capital account will be shrinking as the U.S. would not need foreign capital to finance its current account deficit. This surplus will be drastically cut in less than 10 years. Both cross sectional and time series projections indicate that U.S. overreliance on foreign capital will be over by 2020, and the U.S. could be in a position to actually finance the deficit of other countries.