Causes and consequences of the trade deficit : an overview.

Format:

Book

Government document

Author/Creator:

Arnold, Bruce Gregory, author.

Contributor:

Snyder, Sherry, editor.

United States. Congressional Budget Office, issuing body.

Series:

CBO memorandum

Language:

English

Subjects (All):

Balance of trade--United States.

Balance of trade.

Investments, Foreign--United States.

Investments, Foreign.

United States--Commercial policy.

United States.

United States--Foreign economic relations.

Commercial policy.

International economic relations.

Physical Description:

1 online resource (25 pages) : illustrations.

Place of Publication:

Washington, D.C. : Congressional Budget Office, 2000.

Summary:

Since World War II, the United States has supported agreements among nations to eliminate barriers to international trade and investment. Despite occasional resistance that support has generally reflected a public consensus about the benefits to be gained from free trade. Since long before the war, the United States had run an almost unbroken string of trade surpluses--that is, an excess of exports over imports--and the war damaged or destroyed much of the most significant international competition for U.S. industry. Consequently, before 1970, U.S. industry seemed to have little to fear and much to gain from free trade. After 1970, however, the almost unbroken string of trade surpluses turned into one of trade deficits, and in the 1980s and 1990s, those deficits grew quite large. Opponents of freer U.S. trade point to the deficits as evidence of mistaken U.S. and unfair foreign trade policies. Many are concerned that the deficits cause a number of economic ills, such as unemployment and slower economic growth, and they therefore support import restrictions and other trade policies intended to reduce or eliminate the deficits. In fact, however, the deficits are not caused by either U.S. or foreign trade policies. Rather, they are determined by the balances between saving and investment in the United States and in other countries and the effects of those balances on international flows of capital. The major changes in the U.S. trade deficit since 1970 can be traced to three primary sources: a long decline in saving as a share of gross domestic product (GDP) that began in the mid-1950s and accelerated in the 1980s, fluctuations in the business cycle, and relatively attractive investment opportunities in the United States in the 1990s.

Contents:

Introduction and summary

What is the current-account deficit?

What causes the current-account deficit?

Do inflows of foreign capital harm the economy?

Should anything be done about the current-account deficit?

Conclusion.

Notes:

"March 2000."

"Bruce Arnold of CBO's Microeconomic and Financial Studies Division wrote the memorandum under the direction of Roger Hitchner, Robert Dennis, and David Moore"--Page 2 of cover.

"Sherry Snyder edited the memorandum, Leah Mazade proofread it, and Rae Wiseman prepared it for publication"--Page 2 of cover.

Includes bibliographical references.

Description based on online resource; title from PDF cover (Archive-It, viewed July 15, 2021).

Other Format:

Print version: Arnold, Bruce Gregory. Causes and consequences of the trade deficit

Microfiche version: Arnold, Bruce. Causes and consequences of the trade deficit

OCLC:

692702801