To finance this trade deficit, the U.S. has to borrow from the rest of the world or sell American assets like stocks, businesses, and real estate to the rest of the world.
More Quotes from Martin Feldstein:
An increase in the relative price of products from the low wage manufacturers in Asia and Latin America will also make those products less attractive to American consumers.Martin Feldstein
In short, both experience and economic theory imply that the US could now t to a more competitive dollar without experiencing either increased inflation or decreased economic growth.
Martin Feldstein
The good news is that a competitive dollar in the global market and a strong dollar at home are compatible in both the long run and during the transition to a more competitive dollar.
Martin Feldstein
Today's macroeconomic problems require attention to more fundamental forces of individual incentives and institutional rigidities.
Martin Feldstein
After all, an overvalued dollar gives us the ability to buy foreign goods at lower prices. And the existing volume of exports brings more yen and euros than they would if the dollar were more competitive.
Martin Feldstein
The more competitive value of the dollar turned around the trade deficit.
Martin Feldstein
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