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Questions tagged [balance-of-trade]

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Why do we say the US is in debt to China?

Apple import iPhones manufactured by factories in China. Apple has to pay for these Chinese manufacturers. So, Apple should be in debt with Chinese manufacturers. But why do we say the US government ...
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Is it true that the U.S has to run a chronic trade deficit with the rest of the world as a price to pay for being the world's reserve currency?

I have heard of the argument that in order for USD to be reserve currecy, the rest of the world must own enough USD to store it as reserves. In order for the rest of the world to own enough USD, U.S ...
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How is India able to maintain huge FOREX reserve despite large total current account deficit?

Countries with huge FOREX reserves generally also have huge current account surplus , for example - China has a FOREX reserve of over 3 trillion USD but it's CA surplus is also above of 150 billion ...
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1answer
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The term “Most Favoured Nation” is misleading to me. Please explain

My understanding If Country A extends MFN status to Country B with reduced tariffs for a product, then it must treat all other nations in the same way. By this WTO encourages multilateral ...
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Why do exports include only hard products?

Looking at country lists by exports. Diving into exports always shows things like gas turbines, computer hardware, petrolium -- all physical things. None show things like exporting services: financial ...
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Balance of Payments for US Not Zero

I am following the lecture notes here http://coin.wne.uw.edu.pl/brokicki/wsp_images/oem___set_1.pdf which says balance of payments for a country, is zero CA + KA + FA + SD + RES = 0 The variables ...
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What does China do with the USD it gets from its trade surplus?

The US has trade deficits with China amounting to several hundred billion dollars each and every year. This means annually there is several hundred billion USD flowing into Chinese hands. These ...
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1answer
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Trade in services between the US and China

International trade consists of both goods and services, yet in the case of US-China trade for some reason both the media and official government releases only seem to quote the goods component. So ...
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Import/export by sector/country data source

I am looking for import/exports data by sector and country, with partner countries. The goal is to get a picture of overall imports/exports to/from a specific country with (possibly) all of its ...
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1answer
84 views

Which economical consequences could happen to a country if it forbiddes importing cars?

My country has major economical headaches each 10 years or so, like hyperinflation or defaults or things like that. It's been 17 years since the last major crisis (a larger crisis than the 1930's ...
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0answers
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When finding targets in a trade war, does the goods balance or trade balance matter more?

By most measures, most people who look at trade balance, but it might include a good chunk of services imports/exports who might not be as readily subjected to tariffs.
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Recession and Net Export

When a country's economy is currently in recession (or has entered a recession), will the net export increase or decrease? What will happen to the major trade partner's net export (will it be the ...
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316 views

Abolishing all tariffs without reciprocity

Is a policy of abolishing tariffs without expecting other countries do so a sustainable economic policy? What are the arguments for or against it? Fear of imports is very common among people. Money ...
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2answers
56 views

Balance of Trade ( Surplus and Deficit)

I'm new to economics. I want to ask that what remedies that the government can actually employ to address the deficit/surplus in the fish trade balances over time? My attempt, Trade deficit (i) The ...
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1answer
25 views

Ban an import that is exported

Norway intends to shutdown the fur farming industry over the next 5+ years. In the meantime, can Norway ban imports and sales of fur without violating WTO regulation? Are there alternative strategies?...
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Where UK finds money to sustain its negative trading balance?

UK had a negative trading balance for the last 20 years. Where does it find money to finance it? Is such situation sustainable?
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Do trades in foreign currencies appear differently from trades in domestic currency on the on the BoP?

Is there any difference in the way the 2 scenarios below are expressed on the US's BoP? ...
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2answers
108 views

How does Russia have so much foreign exchange reserves?

Source Russia is under U.S. sanctions. How does Russia have so much foreign exchange reserves?
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1answer
172 views

Why can we finance government deficit by having a trade deficit?

I encountered an example question regarding government deficit as follows: $G-T=(S-I)-(X-M)$ where $G$ is government spending, $T$ is net tax (tax minus transfer payment), $S$ is total private ...
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2answers
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Have UK exports (goods and services) to Ireland declined in value since 2011?

Where can I find the relevant Office Of National Statistics data on UK exports to Ireland? I want to know if the value of UK exports to Ireland has declined since 2011 and if so, does anyone know why ...
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Relationship between Fixed exchange rate and balance of trades

I wanna find a relationship between the fixed moroccan exchange rate and balance of trade and some other variables like international reserves , what type of regression should i use ? thanks in ...
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1answer
312 views

Balance of Trade - Currency devaluation in a price taker economy

How will a real exchange rate devaluation affect Balance of Trade, if an economy is a price taker in world markets for both export and import?
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1answer
122 views

Must total world net exports be zero?

On the Wall Street Journal Op-Ed page (Trump’s Real Trade Problem Is Money ), John D. Mueller discusses the gold standard and claims something that I've either never heard before, don't understand, ...
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1answer
128 views

What is the proof for why border adjustments are exactly offset in theory by currency appreciation?

Why is it true, in theory, that border adjustments are exactly offset by currency appreciation? I've read the colloquial explanations online, but am looking for something more rigorous. For example, ...
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How do currency traders resolve imbalances in the demand for different currencies?

Countries trade different amounts of goods that are inherently imbalanced. How do currency traders resolve these imbalances in the demand for different currencies? For example.... Imagine we have two ...
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Which model of trade is this?

In a recent article, Paul Krugman showed these equations: Which model is this? What do the symbols denote? Is the first symbol a v or nu?
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3answers
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why in some countries trade deficits for a few years generates economical crisis and in United States 40 years of deficit havent?

why in some countries (e.g. Argentina) trade deficits for a few years generates economical crisis and collapse and in United States 40 years of deficit havent? Which are the economical effects in both ...
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Germany's current account surpluses: Negative effect? How to solve them?

The case for a pernicious persistent current account deficit is easy to build: the home country is borrowing abroad for a long period and that debt may reach a point of becoming unsustainable. There ...
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2answers
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Do modern economists still believe balance of trade is an important concept in economics?

My understanding is that discussions about a nation's balance of trade was largely seen as important by mercantilists, but isn't really part of modern economics. Am I right about that?
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Why would investors from other countries want to invest in a country with a large CA deficit?

According to my textbook, the current account and financial account must balance; therefore, a country w/ at large CA deficit will need to fund this by a financial account surplus (i.e. they need to ...
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0answers
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Cloth, Corn and Gold: James Stuart Mill example

I don't quite get James Stuart Mill's example of cloth, corn and gold in "Elements of Political Economy". He supposes that 20 yards of cloth takes the same amount of effort to make as 4 quarters of ...
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2answers
91 views

The Oil hike of the 2000's: Did it go unnoticed, and why?

I'm reading a macro text book, the authors stated that in the 2000's we witnessed the greatest increase in oil prices ever, even when compared to the 70's oil shocks. To most of us, this fact went a ...
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0answers
34 views

How does Global Saving Glut flood the market with cash?

When I was browsing the internet last night, I read a couple articles on the Global Saving Glut. And many has ascribed it to be a cause of US financial crsis. My question is how so? The articles argue ...
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2answers
771 views

What makes the Balance of Payments (BoP) to imbalance?

Theoretically the capital account balance should fully offset the current account balance and the BoP should be zero for any economy. What causes the imbalance or discrepancy in the overall BoP ? What ...
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5answers
151 views

Where are the payments for export in the balance of payment?

I know that when we sell some goods abroad, we credit Goods&Services part within Trade balance, which is a part of Current Account. What part of the Financial Account is debited with the sum ...
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1answer
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Data: Trade imbalance at the County level in the US

I am looking for some source of data on trade imbalance at a county level in the US, preferably for years 1990-2007. Does anyone know if such data can be publicly available? Or any paper that have ...
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2answers
565 views

What is the relationship between S&P500 and the US dollar

In the recent past, both the S&P 500 and the USD (against other currencies) have appreciated a lot. From what I understand, if USD goes up against other companies, the major companies of the S&...
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1answer
47 views

How does an increase in domestic interest rate increase capital inflow?

What I have typed in the title is all I want to know.
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2answers
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Currency Values, Developing Economies and Balance of Trade

For a developing economy like India, where balance of trade is negative, is it good to have a weak dollar or a strong dollar? Dollar value increases (Rupee, the local currency, weakens), imports (...