The Trade Gap May Be Inflated

Exports seem to be undercounted

Unsustainable trends, the late economist Herbert Stein wryly observed, simply do not last. And the unsustainable trend currently stirring a heated debate in economic circles is the nation's record trade gap, which, along with a net outflow of investment income, pushed the current-account deficit last quarter to 4.2% of gross domestic product--its highest level in at least 120 years.

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