Title: The Reasons of U.S. Trade Deficit are a Deficiency of Savings at Home and Global Saving Glut
Abstract: The U.S.trade deficit and a rising current account deficit have become the world economic hot spots.There are many explanations of the reasons of the U.S.trade deficit.The fundamental reason of the U.S.trade deficit is a deficiency of savings from a analytical framework of the mainstream economics.The U.S.saving falls short of what is sought to finance U.S.investment would cause foreign capital inflow.The foreign capital provides purchasing power and supplements a deficiency of savings for the U.S.The American people can buy imports by the purchasing power provided by the foreigners.The U.S.trade deficit is the result of a deficiency of savings.From the global perspective,many foreign economies are in the opposite circumstances,with domestic saving exceeding domestic opportunities for investment.These economies provide outside surroundings of the U.S.trade deficit.Recognizing the cause of the U.S.trade deficit,we can insist on the point that there is no relation between the U.S.trade deficit and the U.S.trade deficit with China.We can also insist on the point that RMB exchange rate is not the result of U.S.trade deficit.
Publication Year: 2006
Publication Date: 2006-01-01
Language: en
Type: article
Access and Citation
AI Researcher Chatbot
Get quick answers to your questions about the article from our AI researcher chatbot