Why does the US have a trade deficit?
Brookings Podcast on Economic Activity
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The Evolution of the U.S. Trade Deficit
This chapter examines the historical trajectory of the U.S. trade deficit, detailing its transformation from surpluses post-World War II to persistent deficits since the 1970s. It highlights the interplay of domestic policies, particularly during the Reagan era, and external factors like the 'China shock', which reshaped American economic landscapes. The discussion challenges conventional views about the drivers of U.S. capital inflows, emphasizing the role of mortgage debt and other advanced economies in the broader context of global trade dynamics.
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