Financing the U.S. Trade Deficit: Role of Foreign Governments

Description:

The nation's trade deficit is equal to the imbalance between national investment and national saving. The financial turmoil and economic contraction during 2008 reduced the gap between national saving and investment. The result was a decline in the trade deficit and the net inflow of capital. If total net capital inflows decline, mainstream economics suggests, all else held constant, that the dollar and trade deficit would decline, U.S. interest rates would rise, and U.S. spending on capital goods and consumer durables would fall, all else equal.

Creator(s): Labonte, Marc
Creation Date: June 29, 2009
Partner(s):
UNT Libraries Government Documents Department
Collection(s):
Congressional Research Service Reports
Usage:
Total Uses: 79
Past 30 days: 0
Yesterday: 0
Creator (Author):
Labonte, Marc

Specialist in Macroeconomic Policy

Publisher Info:
Place of Publication: Washington, D.C.
Date(s):
  • Creation: June 29, 2009
Description:

The nation's trade deficit is equal to the imbalance between national investment and national saving. The financial turmoil and economic contraction during 2008 reduced the gap between national saving and investment. The result was a decline in the trade deficit and the net inflow of capital. If total net capital inflows decline, mainstream economics suggests, all else held constant, that the dollar and trade deficit would decline, U.S. interest rates would rise, and U.S. spending on capital goods and consumer durables would fall, all else equal.

Physical Description:

6 pages.

Language(s):
Subject(s):
Partner:
UNT Libraries Government Documents Department
Collection:
Congressional Research Service Reports
Identifier:
Resource Type: Report
Format: Text