U.S. International Capital Flows in the 1980s

The United States current account deficit - and especially the trade deficit - has received considerable attention in recent years. However, much of the political debate seems oblivious to the fact that the current and capital accounts in the balance of payments are necessarily mirror images of each other. Moveover, when the capital account does enter the debate there is an unfortunate tendency for people to argue that the trade deficit has caused the capital inflow