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The sixth volume in this series of books analyzes the phenomenon of the unprecedentedly high U.S. current account deficit and its counterpart surpluses in the rest of the world. The author develops a four-region model focusing on the United States, Europe, Asia and the oil-exporting countries in order to compute the real exchange rate changes which might accompany a reduction in the world's current account imbalances. In addition to the economics of a purely demand-side-driven world, the impact of a flexible supply side on the behavior of the relevant economic variables is modeled and analyzed.