An Evaluation of Policies to Resolve the Trade Deficit

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Book Chapter


Economics (CMC)

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In policy discussions of the “trade problem” three explanations of the U.S. experience in the 1980s have received particular attention. One is essentially macroeconomic in orientation and attributes the U.S. trade deficit to an excess of domestic aggregate demand over supply. The others stress the importance of trade-specific factors generally and of unfair trade practices and declining comparative advantage in particular.1 The first sees restoration of macroeconomic balance at home as the principal means to trade balance improvement, while the other two focus on trade and industry specific policies.

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© 1989 Springer-Verlag

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