Test Your Knowledge on Trade Balances and Their Impact on Global Prosperity!

Difference between the Monetary Value of Exports and Imports: Key Points

• The balance of trade is the difference between the monetary value of a nation's exports and imports over a certain time period.
• A balance of trade for goods versus one for services can be distinguished.
• A trade surplus or positive trade balance occurs when a country exports a greater value than it imports, while a trade deficit or negative trade balance occurs when a country imports a greater value than it exports.
• As of 2016, around 60 out of 200 countries have a trade surplus.
• Measuring the balance of trade can be problematic due to problems with recording and collecting data.
• Factors that can affect the balance of trade include exchange rates, tariffs, and quotas.
• The trade balance is likely to differ across the business cycle.
• The monetary balance of trade is different from the physical balance of trade.
• The notion that bilateral trade deficits are bad in and of themselves is overwhelmingly rejected by trade experts and economists.
• The balance of trade forms part of the current account.
• Economies that have savings surpluses, such as Japan and Germany, typically run trade surpluses.
• The issue of trade deficits can be complex, and some argue that they exert a "negative externality" on trading partners and pose a threat to global prosperity.