Darren Johnson
ES 212
Professor Zamzow
November 16, 2020
Assignment 12
1.) In this week we are interested in reconciling the empirical data and theory concerning the
relationship between government budget deficits/surplus and the trade balance. You can use any
country for which you are able to find sufficient data. Ideally we want to find a chart
covering several decades worth to display the fluctuations.
The easiest is probably to focus on the U.S. economy and use data from the Federal Reserve of
St.Louis Economic Data site (Fred).
Here’s budget info: https://fred.stlouisfed.org/series/FYFSGDA188S (Links to an external
site.)Links to an external site.
Here’s trade info: https://fred.stlouisfed.org/series/BPBLTT01USQ188S (Links to an external
site.)Links to an external site.
2.) Once you’ve obtained the data and examined the figures, then I want you to reflect on the
comparison between the two. How do we reconcile what we see in the empirical data with the
theory/principles from the course? Does theory match the actual data? Are theory and empirical
data telling a different story?