The Research On The Sustainability Of The U.S. Huge Trade Deficit

Since the 1970s, the trade deficit has been the normality of the U.S. economy. In most years of this century it growed rapidly and has surpassed 5% of the U.S. GDP which is the warning line for several years. In the academic circle, the controversy regarding the sustainability of the trade deficit has also last for years. After the sub-loan crisis, the trade deficit began to come down, but it is still high. As the most powerful economic system in the world, any movement of the United States has a significant impact on the entire world. The prosperity of the U.S. economy and the strong demand of its people stimulate the export growth of other countries, and has become the driven pump of the world economy. The downturn of United States also has huge impact on the development and future prospects of the global economy, and has great impact on the development trend of Chinese economy.This paper studies the sustainability of the U.S. trade deficit from multiple perspectives, using the methods such as the qualitative analysis method, the quantitative analysis method and the dynamic analysis method to analyze the generation of the U.S. trade deficit and its future trends to explore the adjustment method of the world and China. The main contents and the opinions of this article mainly include the following aspects:(1)This article systematically combed the theory of the trade balance: it not only described the flexible exchange rate theory, the savings - investment theory and the international industry shift theory, but also discussed the U.S. dollar theory separately (based on the special position of the U.S. dollar in the international currency system) and used the intertemporal substitution theory to analyze the U.S. trade deficit. All of these were to explore the different perspectives of the cause of the trade deficit.(2) This paper has carried on a thorough analysis of the history and the present situation of the U.S. trade deficit, and has conducted the empirical study of the relationship between the trade deficit and the economic growth and the unemployment rate. It also carried on the analysis of relationship between the sub-loan crisis and the trade deficit and of the factors contributing to the trade deficit from many aspects. All of these were to find the real reason of the existence of the huge trade deficit. (3) Based on the theoretical research and the existing condition analysis, this paper discussed the sustainability of the trade deficit from the angles of financial, trade, world factor as well as the empirical point and it comes to the conclusion that the U.S. trade deficit will be reversed to some extent, but it is impossible to have the fundamentally change which means the balanced trade or even gaining the trade surplus.(4) On account of the adjustment of the trade deficit, we researched the adjustment method of the whole world and our government for the health and sustainable development of the economy.The innovation of this paper are: first, it has analyze the sustainability of trade deficit of the United States from a number of angles, which is more comprehensive than the former research; second, the conclusion was got that the trade deficit is positively correlated with the economic growth and is negatively correlated with the growth of the unemployment through the empirical study; third, the general trend of the future of the U.S. trade deficit was made through the curve estimation of the annual data. In fact, to make an accurate judgment of the future of the huge U.S. trade deficit need a basic understanding of the future economy of the world. So not only the economic situation of U.S., but also the situation of other developed countries and emerging nations need to be studied. It is a complex system , and need to be studied in the next step.