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Why did the U.S. transition from trade surplus in the 1960s to ever increasing trade deficit in 1970s and afterwards? How has the U.S. been

  • Why did the U.S. transition from trade surplus in the 1960s to ever increasing trade deficit in 1970s and afterwards?
  • How has the U.S. been able to maintain (i.e., finance) a current account deficit (mostly due to a deficit in trade of goods)? Will this method continue to work the same way in the future? Why or why not?
  • Is a current account deficit of the BOP, necessarily a bad thing? When can it be problematic? Do you see any signs of problem in the materials provided in this module?
  • In corporate accounting, stock holder's equity is different and separate from liabilities. Liability is a debt, loan or a bond that you have to pay back when it matures. However, equity can be depreciated and stock holders are responsible for their own losses. What's you thought on the equity items as liabilities in the BOP financial account?

Sources:

  1. US BOP Q3 2020: https://apps.bea.gov/scb/2021/01-january/0121-quarterly-international-transactions.htm
  2. US BOP 1960-2019: https://www.census.gov/foreign-trade/statistics/historical/gands.pdf

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