U.S. Trade Deficit: Causes, Consequences, and Cures

1. Front Matter

   Pages i-xv

   PDF

2. Session I

   1. Front Matter

      Pages 1-1

      PDF

   2. The U.S. External Deficit: Its Causes and Persistence

      • Peter Hooper, Catherine L. Mann

      Pages 3-105

   3. Commentary

      • Rudiger W. Dornbusch

      Pages 107-111

   4. Commentary

      • Alan Reynolds

      Pages 113-123

   5. Commentary

      • Michael R. Darby

      Pages 125-127

3. Session II

   1. Front Matter

      Pages 129-129

      PDF

   2. The Current Account and Macroeconomic Policy: An Econometric Analysis

      • John B. Taylor

      Pages 131-185

   3. Commentary

      • Ray C. Fair

      Pages 187-191

   4. The Impact of the U.S. Current Account Deficit on other OECD Countries

      • Jeffrey R. Shafer

      Pages 193-230

   5. Commentary

      • Richard D. Haas

      Pages 231-235

4. Session III

   1. Front Matter

      Pages 237-237

      PDF

   2. Trade Deficits in the Long Run

      • Barry J. Eichengreen

      Pages 239-278

   3. Commentary

      • Anna J. Schwartz

      Pages 279-285

   4. An Evaluation of Policies to Resolve the Trade Deficit

      • Sven W. Arndt

      Pages 287-307

   5. Commentary

      • William Poole

      Pages 309-315

On October 23 and 24, 1987, the Federal Reserve Bank of St. Louis hosted its twelfth annual economic policy conference, "The U.S. Trade Deficit: Causes, Consequences, and Cures." This book contains the papers and comments delivered at that conference. A sharp decline in the value of the dollar against major foreign cur­ rencies began in March 1985 and continued through December 1987. Despite this decline, the U.S. trade deficit experienced considerable growth during this time. Many consider the simultaneous occurrence of these two events over so long a period to be a problem requiring a policy response. The conference addresses this issue. Various papers discuss the cause of the trade deficit, the reason for its size and persistence, its relation­ ship with other macroeconomic variables, its impact on other industrialized countries, and various policy proposals aimed at reducing the deficit. Session I Peter Hooper and Catherine L. Mann provide an analytical setting for the conference with their "The U.S. External Deficit: Its Causes and Persistence." Their observation that the unprecedentedly large U. S. trade imbalance is striking in both its size and its persistence could well be the subtitle of each of the papers presented. The macroeconomic studies, which Hooper and Mann summarize in their review of the existing literature, uniformly conclude that the deficit has not responded to fundamental macroeconomic determinants-relative U.S. income growth and the dollar's exchange rate-in the way that earlier, smaller U.S.

• Bank
• econometrics
• economic policy
• growth
• macroeconomics

• The Federal Reserve Bank of St. Louis, USA

  Albert E. Burger

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