Journal Article

An examination of international trade data in the 1980s

Abstract: This article examines three competing hypotheses and their ability to explain events in international financial markets during the 1980s. The rival hypotheses view the trade deficit as caused alternatively by large U.S. budget deficits, by tight U.S. monetary policy, or by real shocks to investment resulting from changes in the U.S. tax code. While no entirely consistent explanation emerges, the real-shock hypothesis seems to match the data best.

Keywords: International trade; Foreign exchange;

Bibliographic Information

Provider: Federal Reserve Bank of Richmond

Part of Series: Economic Review

Publication Date: 1989

Volume: 75

Issue: Mar

Pages: 21-27