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Economic Commentary

Requirements for Eliminating the Trade Deficit

If the United States is to eliminate its external deficit, it must satisfy certain basic economic conditions with respect to its private savings, private investment, and total government budget deficit. The U.S. current-account deficitreached a record $140.6 billion in 1986and probably will not improve, on balance,this year. A slight worsening earlyin 1987 could offset a modest improvementlate in the year. Consequently, theUnited States will continue to amassexternal debts and will become one ofthe world’s largest debtor countries.

The views authors express in Economic Commentary are theirs and not necessarily those of the Federal Reserve Bank of Cleveland or the Board of Governors of the Federal Reserve System. The series editor is Tasia Hane. This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License. This paper and its data are subject to revision; please visit clevelandfed.org for updates.

Suggested Citation

Humpage, Owen F. 1987. “Requirements for Eliminating the Trade Deficit.” Federal Reserve Bank of Cleveland, Economic Commentary 4/1/1987.

This work by Federal Reserve Bank of Cleveland is licensed under Creative Commons Attribution-NonCommercial 4.0 International