U.S. international transactions in 1998

Kathryn A. Morisse

Federal Reserve Bulletin, 1999, vol. 85, issue May, 287-299

Abstract: U.S. external deficits widened substantially in 1998 because of the disparity between the rapid pace of U.S. economic growth and sluggish growth abroad and also because of the decline in the price competitiveness of U.S. goods associated with the appreciation of the dollar. The nominal current account deficit reached $233 billion in 1998, compared with $155 billion in 1997; the 1998 deficit was 2.7 percent of U.S. gross domestic product, the largest share since 1987. Most of the widening in the deficit was in trade in goods and services. The financial crises in Asia that emerged in the second half of 1997 caused U.S. exports to drop sharply in the first half of 1998. Robust U.S. domestic demand was largely responsible for the brisk rise in imports during the year. Net investment income was negative in 1998 for the second consecutive year. Cumulative deficits in the current account, and the associated capital inflows that have persisted since 1982, have resulted in payments of income on foreign investment in the United States growing more rapidly than receipts of income on U.S. investments abroad. The fallout from the financial crises in emerging markets is likely to have further negative consequences for U.S. external balances in 1999.

Keywords: International trade; Exports; Imports (search for similar items in EconPapers)
JEL-codes: F14 F21 F31 F32 (search for similar items in EconPapers)
Date: 1999
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.federalreserve.gov/pubs/bulletin/1999/0599lead.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgrb:y:1999:i:may:p:287-299:n:v.85no.5

Ordering information: This journal article can be ordered from

DOI: 10.17016/bulletin.1999.85-5

Access Statistics for this article

More articles in Federal Reserve Bulletin from Board of Governors of the Federal Reserve System (U.S.) Contact information at EDIRC.
Bibliographic data for series maintained by Ryan Wolfslayer ; Keisha Fournillier ().