Do recent data provide evidence that the US trade deficit will correct itself?
Author InfoAlbert Wijeweera John Deskins Abstract We use monthly data from the 23 largest US trading partners for the years 1985-2005 to examine the long-run relationship between imports and exports. Results indicate that a long-run equilibrium relationship is identifiable in most of the countries we analyse. However, the country with which the US has the largest trade deficits do not exhibit any long-run relationship, indicating that any self-correcting mechanism on the trade account is either nonexistent or slow in these cases. Further, the presence of a long-run relationship is most apparent in the countries with which the US has a trade surplus. Taken together, these results provide evidence that continued growth in the US trade deficit is likely. Download InfoTo download: If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read t
