The Effects of a Booming Economy on the U.S. Trade Deficit

6 Pages Posted: 12 Apr 2005

See all articles by Kei-Mu Yi

Kei-Mu Yi

University of Houston - Department of Economics; Federal Reserve Banks - Federal Reserve Bank of Minneapolis

Stefan Papaioannou

VNU, Inc.

Abstract

The robust growth of the U.S. economy between 1996 and 1999 spurred U.S. demand for foreign goods and contributed to a surge in the U.S. trade deficit. An analysis of the effects of the expansion on the trade balance suggests that the economic boom can account for roughly a third of the sharp rise in the merchandise trade deficit during this period.

Keywords: potential output, trade deficit

JEL Classification: F4, E3

Suggested Citation

Yi, Kei-Mu and Papaioannou, Stefan, The Effects of a Booming Economy on the U.S. Trade Deficit. Current Issues in Economics and Finance, Vol. 7, No. 2, February 2001. Available at SSRN: https://ssrn.com/abstract=702561

Kei-Mu Yi (Contact Author)

University of Houston - Department of Economics

Houston, TX 77204-5882
United States

Federal Reserve Banks - Federal Reserve Bank of Minneapolis ( email )

90 Hennepin Avenue
Minneapolis, MN 55480
United States

Stefan Papaioannou

VNU, Inc.

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