Increased concerns about the widening U.S. trade deficit can be understood by examining the 1998:IIIQ data on international transactions from different perspectives. The increased gap between imports and exports of goods, services, and income may reflect a relative increase in the disposable income of U.S. citizens, or an increased attractiveness of investing in the U.S. On the other hand, it could be seen as the U.S. economy’s increased vulnerability to withdrawals of foreign funds.
Suggested citation: "Trade Deficits," Federal Reserve Bank of Cleveland, Economic Trends, no. 99-02, pp. 18, 02.01.1999.