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Economic Brief

Oct. 5, 2017

Richmond Fed Research Says Trade Imbalance Fears Are Overstated

Trade imbalances are a perennial concern, but the latest Economic Brief from the Federal Reserve Bank of Richmond contends that fears of trade imbalances are often unwarranted.

The United States has run persistent trade deficits since the late 1970s, while Germany has maintained persistent trade surpluses since the 1990s. The researchers argue that neither position is inherently good or bad. The surpluses mostly reflect Germans’ relative pessimism (more saving than investment) and Americans’ relative optimism (more investment than saving).

The Richmond Fed’s Economic Brief series provides web-exclusive essays on current economic issues and trends. Sign up to receive an email notification when a new essay is posted.


As part of our nation’s central bank, the Richmond Fed is one of 12 regional Reserve Banks working together with the Board of Governors to support a healthy economy and deliver on our mission to foster economic stability and strength. We connect with community and business leaders across the Fifth Federal Reserve District—including the Carolinas, District of Columbia, Maryland, Virginia, and most of West Virginia—to monitor economic conditions, address issues facing our communities, and share this information with monetary and financial policymakers. We also work with banks to ensure they are operating safely and soundly, supply financial institutions with currency that’s fit for distribution, and provide a safe and efficient way to transfer funds through our nation’s payments system.

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