The effects of a booming economy on the U.S. trade deficit

Papaioannou, Stefan; Yi, Kei-Mu

Journal Article

The effects of a booming economy on the U.S. trade deficit

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: Business cycles; International trade;