Balance of trade

Not to be confused with Balance of payments.

Cumulative current account balance 1980–2008 based on International Monetary Fund data
Cumulative current account balance per capita 1980–2008 based on International Monetary Fund data

Balance of trade is the difference between the monetary value of a nation's exports and imports over a certain time period.[1] Sometimes a distinction is made between a balance of trade for goods versus one for services. The balance of trade measures a flow variable of exports and imports over a given period of time. The notion of the balance of trade does not mean that exports and imports are "in balance" with each other.

If a country exports a greater value than it imports, it has a trade surplus or positive trade balance, and conversely, if a country imports a greater value than it exports, it has a trade deficit or negative trade balance. As of 2016, about 60 out of 200 countries have a trade surplus. The notion that bilateral trade deficits are per se detrimental to the respective national economies is overwhelmingly rejected by trade experts and economists.[2][3][4][5]

  1. ^ O'Sullivan, Arthur; Sheffrin, Steven M. (2003). Economics: Principles in Action. Upper Saddle River, New Jersey: Pearson Prentice Hall. p. 462. ISBN 0130630853.
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  5. ^ "What Is the Trade Deficit?". The New York Times. 9 June 2018. ISSN 0362-4331. Retrieved 10 June 2018.