Friday, September 07, 2007

"Balance" in trade balance is overrated

I bought a donut from Dunkin. In trade terms, I ran a deficit, Dunkin a surplus. Does Dunkin need to buy some good from me? Of course not. They're fine with my money, I'm OK with my donut. Trade balance (or, imbalance, for that matter) is a positive concept. Meaning, it is useful to describe what is going on between two parties -- or countries. It is not a matter of good or bad. So, this kind of news that we still have a trade imbalance with Russia (and implying that progress should be made to balance the account) is misleading.


johnorford said...

you get delish donuts, dunkin share holders get pieaces of paper called rupiah -- sounds good to me too! :):)

Anonymous said...

What is Indonesia really get except suffer cause by corruption in all aspects of this country life?