Business Notes: Statistics

Is the oft bemoaned American trade deficit, projected for 1991 at about $100 billion, the result of an accounting error? After studying 1987 imports and exports, a panel of economists assembled by the National Academy of Sciences announced last week that the U.S. trade deficit that year was only $64 billion -- 57% below the officially reported figure of $148 billion.

According to the NAS study, the government's old-fashioned accounting methods failed to keep tabs on such sophisticated multinational activity as "intracompany" sales, exports to a corporation's own foreign affiliates. These exports, which account for more than a quarter of all U.S. trade activity, simply fell through the cracks. On the other side of the ledger, however, the government's accountants were diligent indeed in totting up tariff-producing imports. "In terms of international competitiveness," says economist Robert Baldwin, chairman of the panel, the study suggests that "we are not doing as badly as the trade figures indicate." So the good news is that Americans are more competitive than they thought. The bad news is that they can't always count.