Why does the U.S. always run a trade deficit?
libertystreeteconomics.newyorkfed.org
Why does the U.S. always run a trade deficit?
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Re: Why does the U.S. always run a trade deficit?
#2By "always" they mean since the 1970's of course.
More buyers than sellers.
Re: Why does the U.S. always run a trade deficit?
#3> The saving gap framework helps clarify what trade policies can and can’t do. For example, a free-trade agreement encourages exports, and an industrial policy can foster a re-shoring of production to replace imports. Such policies influence the size and composition of cross-border trade, but the difference between imports and exports is only affected if these policies also change the gap between domestic saving and investment spending.
Is there research on the link between the availability of cheap foreign goods and domestic saving and investment? E.g. would people invest more domestically if they could obtain returns making domestically manufactured goods? Doesn’t the availability of cheap Chinese goods arguably suppress domestic investment? E.g. Apple investing tens of billions into its Chinese supply chain.
I’d also be curious why the EU doesn’t consistently run trade deficits.
Re: Why does the U.S. always run a trade deficit?
#4By "always" they mean since the 1970's of course. More buyers than sellers.
And prior to 1870.
Re: Why does the U.S. always run a trade deficit?
#5Getting real physical products in exchange for imaginary numbers and services is a good deal? We sell a lot of software?
Re: Why does the U.S. always run a trade deficit?
#6Too much consumption versus production. One component is the ever ballooning government debt. Essentially in 'trade deficit' the thing that is not taken into account is one very big export article of the US. Pieces of paper with 'IOU' written on them. The whole Trump trade war is the completely preposterous thing of spending more in the shop than you can afford and then blaming the shop for taking advantage of you. This is the concept of 'responsibility' as it appears to exist in Mr. Trumps bug ridden brain.
Re: Why does the U.S. always run a trade deficit?
#7[deleted]
Re: Why does the U.S. always run a trade deficit?
#8More disposable income/debt in the US (in general).
Re: Why does the U.S. always run a trade deficit?
#9[deleted]
Re: Why does the U.S. always run a trade deficit?
#10> The saving gap framework helps clarify what trade policies can and can’t do. For example, a free-trade agreement encourages exports, and an industrial policy can foster a re-shoring of production to replace imports. Such policies influence the size and composition of cross-border trade, but the difference between imports and exports is only affected if these policies also change the gap between domestic saving and…
If iphones were charged with US labor costs then nobody would buy them