March 6, 2018

Most economists don't see trade gap as money lost

NY Times -Most economists do not see the trade gap as money “lost” to other countries, nor do they worry about trade deficits to a large degree. That’s because trade imbalances are affected by a host of macroeconomic factors, including the relative growth rates of countries, the value of their currencies, and their saving and investment rates. For instance, America’s trade deficit narrowed dramatically during the Great Recession, when national consumption faltered.

Mr. Trump has long argued that the trade deficit hinders economic growth, and that reducing it will accelerate American job creation. Even those who agree with that view say there are better ways to reduce the imbalance than through tariffs, which can backfire and further widen the trade deficit if other countries impose reciprocal tariffs.

1 comment:

greg gerritt said...

We want fair trade, not free trade. Trade tha harms the environment harms everyone