balance of trade

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Related to Trade Balances: Favorable Balance of Trade

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 ?
This model describes the long-run equilibrium relationship among the variables in the bilateral real trade balance model for each country.
This model can be used to estimate the influence of real effective exchange rate changes on real trade balance separately from the influence of other variables by constructing an impulse-response function for generalized one standard deviation real effective exchange rate innovation.
In all cases, the results show that there is a positive long-run relationship between the real effective exchange rate and the real trade balance as expected.
Thus, under the case of a consumer surplus maximizing antitrust authority, the additional producer gains reaped by home producers in postmerger international markets, which might be particularly high under positive trade balances, would enhance the incentive for merging firms to increase their lobbying efforts in order to secure antitrust approval (Clougherty, 2002).
Testing the two competing propositions requires a measure of trade balance to examine whether greater trade balances lead to more strict or more lenient merger policy for an industrial sector.
Accordingly, the empirical evidence supports Proposition 2 over Proposition 1, as more positive trade balances lead to more antitrust scrutiny.
However, the dynamic nature of this relationship and the adjustment of the trade balance to shocks in the budget surplus remains unspecified.
Since we are interested in determining the bounds within which the effect of the budget surplus on the trade balance lie, we estimate variance decompositions for two different orderings.
Denoting the government budget surplus by b, the trade balance by t, money growth by m, the real exchange rate by e, and real GDP by y, the orderings considered are (1) b first, followed by m, e, t and y; {bmety}; and (2) t first, followed by m, e, y and b; {tmeyb}.
Section III briefly discusses the theoretical specification of a testable trade balance equation.
As mentioned above, a nominal devaluation that fails to alter the real exchange rate will have no effects on the trade balance except through real balance effects.
high tech trade balance with the world is expanding rapidly in spite of the global competitiveness of our products.