Abstract: Under the background of global current account imbalance, this paper explores how fiscal deficit, demographic effect and GDP growth affect saving-investment gap by using panel data of 84 countries in 1990-2015,and investigates the root causes of current account imbalances. The initial static regression model results show that fiscal deficit, demographic effect and GDP growth have significant effect on current account imbalance. The improved dynamic regression model results show that fiscal deficit, children′s dependency ratio, elderly dependency ratio and the economic growth rate of a country relative to the world have significant explanatory power to current account imbalance, but children′s dependency ratio and relative GDP growth have different effects on different groups of countries. To control global current account imbalance, we should take into account the international macroeconomic environment and policies to form an internationally accepted effective solution.

Key words: current account imbalance, international perspective, fiscal deficit, demographic effect, GDP growth