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Explaining the U.S. Trade Deficit

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  • Anwar M. Shaikh

Abstract

Conventional theory makes the curious assumption that, in international trade, movements in the real exchange rate negate cost differences so as to make all countries equally competitive. But quite the contrary, it is absolute cost advantages that determine competition between countries, just as they determine the relative price of two sets of goods within one country

Suggested Citation

  • Anwar M. Shaikh, "undated". "Explaining the U.S. Trade Deficit," Economics Policy Note Archive 00-1, Levy Economics Institute.
    • Handle: RePEc:lev:levypn:00-1
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    References listed on IDEAS

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    1. Rudiger Dornbusch, 1988. "Real Exchange Rates and Macroeconomics: A Selective Survey," NBER Working Papers 2775, National Bureau of Economic Research, Inc.
    2. Ochoa, Eduardo M, 1989. "Values, Prices, and Wage-Profit Curves in the U.S. Economy," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 13(3), pages 413-429, September.
    3. Kenneth Rogoff, 1996. "The Purchasing Power Parity Puzzle," Journal of Economic Literature, American Economic Association, vol. 34(2), pages 647-668, June.
    4. repec:bla:scandj:v:91:y:1989:i:2:p:401-32 is not listed on IDEAS
    5. Anwar Shaikh & Rania Antonopoulos, 1998. "Explaining long term exchange rate behavior in the United States and Japan," Macroeconomics 9809011, University Library of Munich, Germany.
    6. Bienenfeld, Mel, 1988. "Regularity in Price Changes as an Effect of Changes in Distribution," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 12(2), pages 247-255, June.
    7. Sven W. Arndt & J. David Richardson, 1987. "Real-Financial Linkages Among Open Economies," NBER Working Papers 2230, National Bureau of Economic Research, Inc.
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