The Effects of a Booming Economy on the U.S. Trade Deficit
6 Pages Posted: 12 Apr 2005
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: Suggested Citation