balance of trade

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Related to Net exports: national income

Balance of trade

Net flow of goods (exports minus imports) between two countries.

Balance of Trade

The difference between the value of a country's exports and the value of its imports. If the value of exports exceeds that of imports, a country is said to have a trade surplus, while the opposite case is called a trade deficit. Analysts disagree on the impact, if any, of the balance of trade on the economy. Some economists believe that an overly large trade deficit causes unemployment and lowers GDP growth. Others believe that the balance of trade has little impact, because the more international trade occurs, the more likely it is that foreign companies will invest in the home country, negating any negative effects.

balance of trade

A net figure calculated by subtracting a country's imports from its exports during a specific period. If a country sells more goods and services than it purchases, its balance of trade is said to be positive, that is, exports exceed imports. Such a balance is generally considered to be favorable. Conversely, a negative balance is said to be unfavorable. A country's balance-of-trade position has great impact on its economic activity and on the profits of companies operating within it. See also trade deficit, trade surplus.

Balance of trade.

The difference between the value of a country's imports and exports during a specific period of time is called the balance of trade.

If a country exports more than it imports, it has a surplus, or favorable balance of trade. A trade deficit, or unfavorable balance, occurs when a country imports more than it exports.

balance of trade


balance of trade

a statement of a country's trade in GOODS (visibles) with the rest of the world over a particular period of time. The term ‘balance of trade’ specifically excludes trade in services (invisibles) and concentrates on the foreign currency earnings and payments associated with trade in finished manufactures, intermediate products and raw materials, which can be seen and recorded by a country's customs authorities as they cross national boundaries. See BALANCE OF PAYMENTS.
References in periodicals archive ?
The results of the estimation of the long-term relationship between the variables of ARDL model show that the proportion of world prices to domestic prices and the exchange rate at 5%, production variable at 1% and the net exports variable in at 10%, have a significant effect.
2], shifts the net exports function downward by a greater amount than before, or the distance [BE.
Equation (5) is going to be estimated from time series data collected on the growth rates of aggregate expenditure, consumption, investment, government spending and net exports.
This article focuses on the development of R&D capacity, net exports, and profits of China's furniture industry as well as on their relationship by drawing upon the findings of Dai and Yu (2010) for the model of pre-export R&D capacity, productivity, and exports and upon the characteristics of the dynamic path model on technology and trade put forward by Virasa and Tang (1998).
It said that the negative public investment was due to the significant lack of public sector investment in infrastructure over the 11-year period, while the negative net exports reflect the persistently strong external imbalance, slow export growth, and the high level of imports.
5 billion with no repeat of the large claims of pounds 2 billion associated with Hurricane Katrina which reduced net exports in 2005.
As a result, North American net exports will continue to grow and are being forecast to exceed 23 million tons by 2012.
If that doesn't work--and the extent of overinvestment and inefficient investment means it cannot be guaranteed to work--then either or both of increased government investment and of even bigger net exports will be necessary for a soft landing.
Now rates are rising and oil is expensive, but Shulman believes that strong capital spending and a leveling off in the decline of net exports could play a similar role in the coming economic shakeout.
However, much of the increase in net exports in the first quarter was due to temporary depletion of inventories of items like crude oil and petroleum products.
Net exports should remain an exogeneous variable in most models attempting to evaluate the impact of the trade deficit.