United States Trade Deficit and the "New Economy"

Amidst the overall strength and longevity of the United States economic expansion of the 1990s, a growing current account deficit is one indicator that often is viewed with concern. In this article, the author discusses some basic economic principles about current accounts and how they relate to the United States experience during the 1990s. He suggests that recent deficits should not be thought of as a source of weakness in an otherwise vigorous economy, but rather, that they are reflective of the same forces underlying recent economic strength.