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

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  • Stefan Papaioannou
  • Kei-Mu Yi

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.

Suggested Citation

  • Stefan Papaioannou & Kei-Mu Yi, 2001. "The effects of a booming economy on the U.S. trade deficit," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 7(Feb).
    • Handle: RePEc:fip:fednci:y:2001:i:feb:n:v.7no.2
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    References listed on IDEAS

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    1. Ray Barrell & James Sefton, 1995. "Output Gaps. Some evidence from the UK, France and Germany," National Institute Economic Review, National Institute of Economic and Social Research, vol. 151(1), pages 65-73, February.
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    3. Marquez, Jaime, 1990. "Bilateral Trade Elasticities," The Review of Economics and Statistics, MIT Press, vol. 72(1), pages 70-77, February.
    4. Peter Hooper & Karen H. Johnson & Jaime R. Marquez, 1998. "Trade elasticities for G-7 countries," International Finance Discussion Papers 609, Board of Governors of the Federal Reserve System (U.S.).
    5. Kuttner, Kenneth N, 1994. "Estimating Potential Output as a Latent Variable," Journal of Business & Economic Statistics, American Statistical Association, vol. 12(3), pages 361-368, July.
    6. Matthew Higgins & Thomas Klitgaard, 1998. "Viewing the current account deficit as a capital inflow," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 4(Dec).
    7. Barrell, Ray & Sefton, James, 1995. "Output Gaps. Some evidence from the UK, France and Germany," National Institute Economic Review, National Institute of Economic and Social Research, vol. 151, pages 65-73, February.
    8. repec:sae:niesru:v:151:y::i:1:p:65-73 is not listed on IDEAS
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    1. Mejía Méndez, Cinthya & Jáquez Polanco, Jaqueli & Cruz-Rodríguez, Alexis, 2017. "Determinantes del déficit comercial de la República Dominicana [Determinants of the trade deficit of the Dominican Republic]," MPRA Paper 81218, University Library of Munich, Germany.

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    Keywords

    Business cycles; International trade;

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