WORKINGPAPER25-14TheUSTradeDeficitandForeignBorrowingHowLongCanItContinue?TamimBayoumiandJosephE.GagnonJuly2025ABSTRACTTamimBayoumiisTheUnitedStateshasrunsignificantexternaldeficitsforhalfacenturyandtheavisitingscholaratassociatednetinternationalliabilitieshavebeengrowing,especiallyrecently.Yet,King’sCollege.incontrasttoearlierperiodswhenthedeficitwasrising,feweconomistshaveexpressedconcernsaboutexternalsustainabilitylately.ThispaperexplorestheJosephE.Gagnonisseniordriversandrisksassociatedwiththedeficits.ThemostpersistentdriverofUSfellowatthePetersondeficitsistheattractivenessofUSfinancialassetstoforeigninvestorsowingtoInstituteforInternationalthecentra...
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