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Who Financed Recent U.S. Trade Deficits?

Author(s)

John B. Benedetto


Abstract

Some popular and academic economic explanations of the U.S. trade deficit since 1998 emphasize U.S. private borrowing or foreign private interest in investing in the United States. This paper shows basic U.S. government data that demonstrate that foreign governments have been major financers of the U.S. trade deficit in the 2000s. In this light, it considers several explanations of recent U.S. trade deficits to see if they match these basic data.