This paper analyzes trade deficits from both an accounting and philosophical perspective. The author concludes that trade deficits are considered to be undesirable because of faulty accounting and philosophical analysis and that global economic progress will continue if free trade expands...

In this paper we will use a status-preference framework, together with a standard cost of adjustment investment function, to study the dynamics of the small open economy current account balance. We demonstrate that the transitional dynamics of the economy is characterized by two speeds of...