Thomas Grennes's letter criticizing my article, "The Unsustainability of the US Trade Deficit," fails to distinguish between the trade deficit and the current account deficit, and therefore does not respond to my argument.

The U.S. sacrifices about ten full time jobs for each million dollars of net imports of goods and services. Its billions of dollars in trade deficit is the primary reason behind its millions of job losses. Loss of jobs, in turn, decreases income, demand, investment, and tax revenues. Budget...

The cointegration technique is used to examine the long-run and short-run relationships between the real Malaysian trade balance with the real exchange rate, domestic and world incomes. The results suggest that a real ringgit exchange rate depreciation improves the trade balance in the long run....

This study investigates the factors behind the growing U.S. trade deficit in consumer-oriented agricultural and food products by using reliable panel data and an empirical trade model derived from international trade theory. The results indicate that per capita income in the United States...

In this paper we test the well-known hypothesis of Obstfeld and Rogoff (2000) that trade costs are the key to explaining the so-called Feldstein-Horioka puzzle. Using a gravity framework in an intertemporal context, we provide strong support for the hypothesis and we reconcile our results with...

This paper examines the short- and long-run relationships between trade balance, real exchange rates, income and money supply in the case of Malaysia. The inclusion of income and money variables in the study is purposely to examine the monetary and absorption approaches to the balance of...

This commentary is served as an additional light both from theoretical and empirical perspectives, on the study by Duasa (Global Economic Review, 2007, 36, pp. 89-102) who examined the short- and long-run relationships between trade balance, real exchange rates, income, and money supply for...

We consider a two-country, two-sector OLG model. It is shown that the trade balance and the relative price of exports are always positively related when exports are labor intensive regardless of the elasticity of intertemporal substitution in consumption. A large response of savings to future...

The Moroccan economy suffers deeply from two exogenous shocks: high oil prices and drought periods. The irregular rainfall and instability of oil prices increase the volatility of economic growth and the uncertainty around growth forecasts. We exploit the vulnerability to these shocks in order...