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S. population in 1999 and 30 percent of exports. California is the biggest exporter to Asia, and to Europe as well. Texas, however, is the most important exporter to the Americas. ) Florida, with the fourth largest population, has an export share which is large but below its population share, doubtless reflecting its large retired population and the relatively limited role of manufacturing in the Florida economy. It is worth reiterating that these data cover only goods exports; they do not measure the overall participation of a state in the international economy.

S. trade deficit. The second is the necessary identity in the National Income and Product Accounts between net foreign investment and the gap between domestic private and government investment and saving. This implies that a domestic saving gap must be financed by foreigners; if they don’t, domestic interest rates must rise, stifling investment and/or encouraging domestic saving. S. FOREIGN TRADE AT THE MILLENNIUM Together, these identities are taken by many economists to mean that a deficit in the national saving-investment balance will require a corresponding deficit in international trade, and therefore should be regarded as the ultimate cause of the trade deficit.

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