Trade Deficit in the US - Research Paper Example

The paper "Trade Deficit in the US" is an outstanding example of a macro & microeconomics research paper. International trade is at its zenith after the emergence of globalization. Presently, all world economies maximize their social welfare by actively participating in trading affairs. Most of the nations across the world at present are open economies, subject to free-market operations in the global market places. Public, as well as private sectors, actively participate in generating an economic surplus in nations.

With the essence of international trade, the countries in the contemporary world have successfully improved their level of domestic products. The rise in the income level of the nations has augmented the per capita income thresholds. As claimed by the famous economist, David Ricardo, modern economies gain competitive advantages with the assistance of international trade. However, it should be noted that the states of economic affairs in the nations have become highly complex after the internationalization of business affairs.

The countries in the current epoch are often exposed to the trade deficit and currency risks due to the losses incurred in international trading affairs. This research paper will analyze the trade deficit experienced in the United States (U.S.). According to the analysis of the U.S. Bureau of Economic Analysis and the Institute of U.S. Census Bureau, the trade deficit of the U.S., as recorded in 2013, is $40.6 billion (till October). The U.S. is regarded as the most technologically powerful and progressive nation in the world.

As recorded in 2012, the revenue of the country was $2.449 trillion and its aggregate expenditures in the domestic market were $3.583 trillion (CIA, 2013). The gross value of exports of the country was $1.516 trillion, yet it is facing heavy deficits in the current era. Thus, it is highly rational to analyze the underlying cause of this deficit. Figure 1 in the Appendix shows the trend of the trade deficit in the U.S. from 2003 to 2013.