Unless The Trade Deficit Shrinks, The Combination

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.

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.

First, I Think The Science Of Monetary Economics Has Clearly Gotten Better.

We Pay Some Price When Necessary To Bring Down Inflation But That Price Is Temporary And Is Not Large Relative To The Permanent Gain From Reduced Inflation.

The Only Way That We Can Reduce Our Financial Dependence On The Inflow Of Funds From The Rest Of The World Is To Reduce Our Trade Deficit.