This paper presents an empirical analysis of the factors that contributed to the unprecedented widening of the U.S. external deficit between 1980 and 1986. The paper presents an empirical model of the U.S. current account that is used to assess the relative importance of changes in U.S. price...

Interest in income and price elasticities for international trade has increased recently because of the debt crisis that many developing countries are experiencing. Estimates of income elasticities of import demand, however, range from a low of 1.3 to a high of 4.7. Such differences have...

This paper presents an empirical analysis of the macroeconomic and microeconomic factors underlying the causes and persistence of the U.S. external deficit in the 1980s. The paper begins with a review of the extensive literature on this subject, and then outlines an analytical framework that...