U.S. Trade Imbalance Hinges on Capital-Labor Ratio, Not Exchange Rates
The study looked at what affects the trade between the U.S. and its major trading partners, focusing on things like the exchange rate and the type of goods being traded. They found that the amount of capital compared to labor is more important for U.S. trade than the exchange rate. Most trade between the U.S. and its partners happens within the same industry, except for agriculture, which depends more on the resources available.