Since 1981, the United States has managed a trade deficit that has become more negative with each passing year. Yet, economic growth has been on a positive trend. Is there a relationship between the two? Using annual data from 1950 to 2014, this article investigates the causal relationship...

Global current account imbalances were a major subject of concern in the years before the recent financial crisis. It is shown that the expected (negative) equilibrium relationship between net foreign assets and the trade balance that had held in the previous twenty years appeared to break down...