Wednesday, June 8, 2016

Brief follow-up on Glasner on Trade

David Glasner:

buying less from foreigners means that they will buy less from us for the simple reason that they will have fewer dollars with which to purchase our products.

Glasner's statement assumes that trade deficits tend to zero. This need not be the case. It is not the case for the U.S. We buy more and more from foreigners, increasing our trade deficit endlessly.

In addition, if I have it right, we typically run surpluses with some nations and deficits with others. This also contradicts Glasner's claim.

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