Introduction I have argued rather strongly that the phrase "trade deficit" has no significant meaning. The fact that one party in a transaction gets goods or services and the other receives some form of money does not mean that either party is getting "ripped off." Much of this misunderstanding stems from a lack of understanding … Continue reading Complexity of Trade

Definition What is a trade surplus? To begin this discussion, let's define "trade surplus" from the same source that I used for the definition of a trade deficit. A trade surplus represents a net inflow of domestic currency from foreign markets. It is the opposite of a trade deficit, which represents a net outflow and … Continue reading Explain Trade Surplus

The only thing negative about "trade deficits" consists of the name. Introduction What Is a Trade Deficit? A trade deficit occurs when a country's imports exceed its exports. A trade deficit is also referred to as a negative balance of trade (BOT). The balance can be calculated on different categories of transactions: goods (a.k.a., "merchandise"), … Continue reading Explain The Trade Deficit