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Why does having a reserve currency status guarantee a trade deficit? For that to be true, (1) foreign-held dollar reserves would have to grow at a sufficient r
by RivieraKid 1y ago
Why does having a reserve currency status guarantee a trade deficit? For that to be true, (1) foreign-held dollar reserves would have to grow at a sufficient rate and (2) Americans would need to get increasingly indebted, which is a voluntary decision. The fact that foreign goods are cheap doesn't force Americans to get in debt in order to buy them.