US Trade Deficit and Rate of Interest

It gives me a great pleasure to let all know that my article “A Failure Analysis of the US Economy” has been cited by Prof Ravi Batra and Prof Hamid Beladi in their work published in Review of International Economics. As an engineer it is my pleasure and honor to have my work in economics referenced for International Journal like Review of International Economics. Please read the attached recommendation from Prof Batra himself.

An Economist recommends an Engineer

An Economist recommends an Engineer

Abstract- It is well known that nations with high trade deficits normally have higher interest rates than those with surplus or balanced trade. However, such has not been the case with the USA, which has seen a relentless trade deficit since 1982. Its interest rates have been lower than those prevailing in many trade-surplus nations. Furthermore, these rates fell even as the trade shortfall shot up, generating an interest-rate paradox. This paper demonstrates that, unlike for other nations, the rising trade deficit itself became the cause of lower US interest rates, and this happened because of the world’s strong interest in maintaining a high value of the dollar.

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