Could someone be so kind as to give the highlights we need with regards to the current account, capital account, ect…
Its true that if the current account deficit is unsustainable, that implied depreciation of the currency based on the logic that we are purchasing more from the rest of the world than we are exporting, putting downward pressure on the currency…correct?
But how does the capital (and or reserve) account factor in with regards to balancing the equation and in regards to depreciation of the currency?
Is it true to say a capital account surplus indicates deprecation of the currency (if unsustainable maybe)?