Questions tagged [balance-of-trade]

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Causes of trade deficit: Multiple views

I am trying to understand the causes and macroeconomic implications of running a trade deficit in the United States, and I came across a few different views on this topic. I'd like to know if there ...
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25 views

Why would expanding fiat paper issue lead to decreased exports?

I'm reading "A History of Money and Banking in the United States" by Murray Rothbard, and I'm having trouble understanding this one piece of history. Basically, the Massachusetts government issues ...
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2answers
51 views

How are trade deficits financed?

The usual answer is either "foreign debt" or "Foreign Direct Investment". But: Why does that make sense? And why wouldn't be financed otherwise like from importers taking out bank loans domestically ...
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54 views

Why is it so hard to understand NCO = NE?

A lot of explanations about this matter depend on the fact that the foreign cash could be seen as a foreign assets. They say like "if you export a car and earn 100 yen, then it means that you have now ...
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0answers
22 views

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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23 views

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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32 views

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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38 views

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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38 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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15 views

Testing the Marshall-Lerner Condition

Assuming initially £1=$2 Exports Px £100 QDx1 500 Export Revenue £50,000 Imports Pm1 £50 QDm1 1000 Import Spending £50,000 Trade Balance = £0 After a 10% depreciation of the £ Assuming PEDx = -0....
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12 views

Relationship between Fiscal policy and net exports

I am confused about the relationship between fiscal policy and net exports. Suppose government goes for expansionary fiscal policy Case 1  - If public expenditure rises, income rise, rise in ...
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0answers
4 views

Sources of data for GDP and BoP accounts

When an American buys a coffee within the US, how does that 3.50 dollars worth of consumption expenditure make it's way to the US GDP account? Is the information obtained from the company's tax ...
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6 views

Deficit adjustment - role of exchange rates

Krugman states the following: Suppose the world economy is in equilibrium. Suddenly the dollar depreciates for some reason. Almost all economists would agree that long run effect would be some ...
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2answers
146 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
449 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
77 views

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 ...