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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

    as
    1. 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.
    2. repec:sae:niesru:v:151:y::i:1:p:65-73 is not listed on IDEAS
    3. Ms. Paula De Masi, 1997. "IMF Estimates of Potential Output: Theory and Practice," IMF Working Papers 1997/177, International Monetary Fund.
    4. 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).
    5. Marquez, Jaime, 1990. "Bilateral Trade Elasticities," The Review of Economics and Statistics, MIT Press, vol. 72(1), pages 70-77, February.
    6. 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.
    7. 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.).
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    Cited by:

    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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