The Trade Balance Today, and Near Future

If we wanted to reduce the trade deficit — let’s say because we wanted to increase aggregate demand and hence employment, rather than some atavistic belief the deficits are bad — then we will probably need to convincingly deal with the pandemic. Remember, the trade deficit (in NIPA terms) is now bigger than it was the day Mr. Trump took office.

Figure 1: Net exports to GDP ratio (blue). NBER defined recessions shaded gray, dashed line at last NBER peak. Orange denotes Trump administration. Source: BEA, NBER and author’s calculations.

Part of the reason why imports have surged is because consumer goods imports have surged. Consumption of durable goods and imports of durable goods are shown below.

Figure 2: Consumption of durables (blue), consumer durable imports ex.-auto (red), both in billions Ch.2012$, SAAR. Source: BEA.

I haven’t included the increase in imported automobiles in the above figure, given I don’t have statistics on how much goes to business, and how much to households. However, the one below gives an idea of the importance of imports.

Figure 3: Consumption of durables (blue), automobile and parts imports (red), both in billions Ch.2012$, SAAR. Source: BEA.

Obviously, with the cessation of rebates and enhanced unemployment payments, and increased uncertainty regarding a new fiscal recovery package, consumption growth overall will be muted. But households will keep substituting to goods and away from services that entail high contact as long as the pandemic is in place. In this sense, dealing with the public health crisis is essential to dealing with the trade balance (as well as the economy overall).

(On the other hand, the cessation of uncertainty-enhancing tweeting will likely depreciate the dollar, leading to some improvement in the trade balance, ceteris paribus — see this post).



31 thoughts on “The Trade Balance Today, and Near Future

  1. 2slugbaits

    households will keep substituting to goods and away from services that entail high contact as long as the pandemic is in place.

    Yes. And that’s why it’s high time that economists and policymakers start looking at BEA’s I/O tables. For example, the portion of value added generated by the dining & drinking sector that is subsequently used as inputs to other sectors is relatively low. Most of that sector’s value added shows up as final demand rather than input demand from other sectors. So on the one hand that means restricting the restaurant and bar sector would not have much impact on the ability of other sectors to produce their output. OTOH, the dining and drinking sector does use a lot of intermediate inputs from other sectors, so reduced demand from that sector will hurt demand for upstream sector inputs. On the third hand, much of that reduction in upstream demand could be recovered with higher demand in substitute sectors. For example, a drop in restaurant demand will reduce demand for steaks, potatoes, ribs, wine, desserts, etc. But at the same time there will likely be an increase in grocery store sales of steaks, potatoes, ribs, wine, desserts, etc. It’s hard for people to substitute away from eating. What gets lost with restaurants closing isn’t the output of food, but the value added experience of dining out rather than dining at home. And that’s what we saw with the previous restrictions. According to restaurants and hotels saw a 66.5% drop in early Spring relative to the pre-pandemic level. At the same time there was a 68.6% increase in grocery sales.

    It is possible to reduce demand for service sector output while minimizing the impact on gross output (i.e., GDP plus intermediate inputs). It just requires someone a helluva lot smarter than Larry Kudlow.

    1. pgl

      “It is possible to reduce demand for service sector output while minimizing the impact on gross output (i.e., GDP plus intermediate inputs). It just requires someone a helluva lot smarter than Larry Kudlow.”

      Yea Kudlow gets not of this. But wait if the services sector was nothing more than non-tradeables activity, it is irrelevant to the trade balance. Not that nontradable production does not affect GDP but our host is focusing on net exports.

      But wait – it is also about intermediate inputs which could include wine imported from France or Australia or foods imported from other lands. Now I know you get this but nobody in this current White House team do – especially Kudlow the Klown.

    2. Dr. Dysmalist

      Three hands? I’m jealous.

      Regarding your third hand (lucky dog!) data, I can corroborate it with first-hand observation. When our state was ‘shut down’ in the spring, demand for foodstuffs and even alcohol boomed, especially pickup and delivery ordering after regulations were changed to allow it for alcohol. For a couple of weeks, we struggled mightily to keep up, both with receiving enough product and with filling orders on time. Crazy times.

  2. pgl

    The focus seems to be that real imports rose from 2020QII to 2020QIII which is true but real imports plummeted from 2019QIV to 2020QII. The real deal seems to be the massive decline in real exports:

    A bit of recovery in the third quarter but real exports are incredibly depressed. Is that because workers are not going to the factories for fear of the virus or is it because the rest of the world does not want to buy our goods?

    I would ask Lawrence Kudlow but Trump’s chief “economist” is about as clueless as it gets.

  3. pgl

    Looking at those FRED graphs of real exports and real imports, the latter rose in Trump’s first 3 years
    but WTF was going on with real exports? Very little in the way of export growth at all. And Trump told us we would have an export boom if we elected him. Of course Trump does not get basic economics and he hired about the dumbest crew of advisors ever assembled.

  4. pgl

    Winning Pennsylvania and Nevada put Biden at 280 which is important as this includes the 10 EC votes from Wisconsin which may have a recount. What is left? Some say Biden has won the 10 EC votes in Arizona but this one is not settled. Trump will prevail in North Carolina and Alaska with Georgia’s 16 EC votes still trending Biden but again this is close.

    We had no updates today which means the vote counters got a well deserved break. And of course no matter how all this pans out Biden got to 270 or more. But to me getting to 306 is still important as it is the biggest FU to Trump (Hillary get this).

  5. ltr

    November 9, 2020

    Pfizer’s Early Data Shows Vaccine Is More Than 90% Effective
    Pfizer announced stunning early results from its coronavirus vaccine trial, cementing the lead in a frenzied global race that has unfolded at record-breaking speed.
    By Katie Thomas, David Gelles and Carl Zimmer

    The drug maker Pfizer announced on Monday that an early analysis of its coronavirus vaccine trial suggested the vaccine was robustly effective in preventing Covid-19, a promising development as the world has waited anxiously for any positive news about a pandemic that has killed more than 1.2 million people.

    Pfizer, which developed the vaccine with the German drugmaker BioNTech, released only sparse details from its clinical trial, based on the first formal review of the data by an outside panel of experts.

    The company said that the analysis found that the vaccine was more than 90 percent effective in preventing the disease among trial volunteers who had no evidence of prior coronavirus infection. If the results hold up, that level of protection would put it on par with highly effective childhood vaccines for diseases such as measles. No serious safety concerns have been observed, the company said.

    Pfizer plans to ask the Food and Drug Administration for emergency authorization of the two-dose vaccine later this month, after it has collected the recommended two months of safety data. By the end of the year it will have manufactured enough doses to immunize 15 to 20 million people, company executives have said….

    1. The Rage

      Early data???? So what for 2 weeks??? Others have already been there. Nothing new other than the propaganda.

  6. ltr

    November 8, 2020



    Cases   ( 10,288,480)
    Deaths   ( 243,768)


    Cases   ( 8,553,864)
    Deaths   ( 126,653)


    Cases   ( 1,787,324)
    Deaths   ( 40,439)


    Cases   ( 1,192,013)
    Deaths   ( 49,044)


    Cases   ( 961,938)
    Deaths   ( 94,808)


    Cases   ( 672,507)
    Deaths   ( 11,505)


    Cases   ( 264,113)
    Deaths   ( 10,522)


    Cases   ( 86,212)
    Deaths   ( 4,634)

  7. ltr

    November 8, 2020

    Coronavirus   (Deaths per million)

    US   ( 735)
    Mexico   ( 733)
    UK   ( 721)
    France   ( 619)

    Canada   ( 278)
    Germany   ( 137)
    India   ( 91)
    China   ( 3)

    Notice the ratios of deaths to coronavirus cases are 9.9%, 4.1% and 2.3% for Mexico, the United Kingdom and France respectively.  These ratios are high, but have been significantly higher, while falling recently as new cases are being rapidly recorded.

  8. ltr

    November 9, 2020

    Chinese mainland reports 33 new COVID-19 cases

    The Chinese mainland registered 33 new COVID-19 cases on Sunday, 32 from overseas and 1 locally transmitted, the National Health Commission announced.

    The local transmission was reported in north China’s Tianjin Municipality.

    A total of 9 new asymptomatic COVID-19 cases were recorded, while 804 asymptomatic patients remain under medical observation. No COVID-19-related deaths were reported on Sunday, and 19 patients were discharged from hospitals after recovering.

    As of Sunday, the total number of confirmed COVID-19 cases reached 86,245, with 4,634 fatalities.

    Chinese mainland new imported cases

    Chinese mainland new asymptomatic cases

    [ There has been no coronavirus death on the Chinese mainland since May 17.  Since June began there have been 5 limited community clusters of infections, each of which was contained with mass testing, contact tracing and quarantine, with each outbreak ending in a few weeks.

    One local infection has just been recorded in Tianjin, with mass testing, contact tracing and quarantine again being used to identify the origin of as well as to contain and end this possible outbreak.

    Imported coronavirus cases are caught at entry points with required testing and immediate quarantine.  Asymptomatic cases are all quarantined.  The flow of imported cases to China is low, but has been persistent.

    There are now 424 active coronavirus cases in all on the Chinese mainland, 8 of which cases are classed as serious or critical. ]

  9. pgl

    CNN polled a lot of Americans on the Presidential vote and most were rightfully elated. A few may have been Trump morons and of course maybe one or two stupid comments might be included. But CNN choose this incredibly dumb comment to highlight as its headline:

    Ricardo Romeu: “I feel like America is about to be rudely awakened. This ‘President-elect’ and his running mate are too liberal for this country and do not truly understand what Freedom costs. I, like many others, will say it again Joe Biden is a FAILED career politician. 47 years with nothing but empty promises and a silent 8 years as Vice President under the Obama administration. So though CNN and the mainstream media AKA the MOB says that Joe Biden has (won), I believe it is still purely speculation and the truth of this election will come to light. #TRUMP4EVER”

    Even Faux News would not lead with these pathetic comments but CNN did.

  10. pgl

    Ben Harris along with William Gale has authored useful papers on long-run fiscal policy. He will be tested as the deficit hawks start up again:

    Joe Biden’s victory last week has brought with it Democratic control of the White House and hopes for massive COVID-19 stimulus and deep reform bills. But Biden’s win, coupled with Democrats’ failure to capture a Senate majority, will come with an unfortunate hanger-on that conveniently disappeared during the Trump administration: calls for austerity. The ushering in of Democratic control of the White House will undoubtedly revive the harping of the budget scolds, who mostly went dormant during the Trump presidency after spending eight years heckling President Obama.And those austerity hawks will have a powerful point of leverage, in the form of a GOP Senate majority (assuming Democrats can’t flip both the Georgia seats that are heading to a run-off).
    The Obama administration’s willingness to play along with their anti-government spending temper tantrums was a calculus that the former President would grow to regret. That nary a peep was heard from the austerity alarmists for most of the following four years — during which Trump added nearly $4 trillion to the total government deficit, according to one estimate — reinforced the lack of sincerity of their chicken little routine.But as Trump’s likely defeat grew more imminent, the groundwork for another round of budget hawkery began being laid afresh.
    An early and crucial test for the Biden administration is whether the former Vice President will give any of these bad-faith spending complaints any credence — and let them kneecap his ability to respond to the economic carnage that COVID-19 created, as well as a whole host of progressive agenda items he ran on. Or will he learn from the travails of the last administration in which he served, and pay them no heed? Sen. Mitch McConnell (R-KY) is already bludgeoning the incoming Biden administration with austerity demands as negotiations around a second COVID stimulus package take shape. “Something smaller, rather than throwing another $3 trillion at this issue, is more appropriate,” McConnell told reporters in Kentucky on Nov. 6.
    It’s a familiar refrain that we’ll likely be hearing for the four years to come. As Jared Bernstein, an economic adviser to Biden, wrote in August, caving in to budget scolding “is a recipe for losing progressive support and political power — something no Democrat should want.” It’s long been a commonplace that patterns of freakouts over government spending reach their apex only when Democrats are in power, while such concerns were almost nowhere to be found when a Republican administration is adding line items to the budget.
    When Obama took office in 2009, he came in with huge congressional majorities and plans for sweeping reform and stimulus following the financial crisis. But amid that progressive ambition, he played along with bogus calls from the right that the federal government to tighten its belt, even going so far as to undercut his own party once Republicans retook the House in the 2010 midterms.
    Republicans that went silent about fiscal sustainability the moment Trump was elected spent the Obama years crowing about the debt. Rep. Paul Ryan (R-WI) exemplified that trend, complaining that, “given the magnitude of our debt burden, the size of the spending cuts should exceed the size of the President’s debt limit increase.” But rather than insist that he’d only sign “clean” debt ceiling increases — which is the mechanism Congress uses to avoid the government defaulting on U.S. debt — Obama engaged in negotiations that allowed Republicans to hold the credit of the United States hostage to secure more spending cuts. Obama’s buckling to those demands undercut the priorities of his own party. But what did the Obama administration get in return for these concessions to those who bandy about horror stories of our grandchildren paying the debts we incur today? Nothing, apart from scolding for not showing enough “leadership” on spending to bring the intransigent GOP around. Obama wasn’t an outlier among leaders of this party in his willingness to play the spending games by Republicans’ rules. Senate Democrats tried to outmatch Republicans in the race to the bottom in the austerity wars — Chuck Schumer once bragged about his caucus’ 2011 spending plan having “more cuts” than John Boehner’s. But Obama eventually came to rue the policy in a budget request towards the end of his administration, deriding it as “mindless austerity.”
    Eschewing the usual GOP fear-mongering about government spending — including promises not to cut the social safety net programs Republicans derisively call “entitlements” — helped catapult Donald Trump to the top of the 2016 primary and eventually the White House. Within days of Trump being sworn in as President, Republicans were already backing down from their budget belt-tightening crusade. When Congress’ GOP leaders were asked by a reporter at the Jan. 2017 GOP retreat to commit to not adding to the end-of-the year government deficit, no such commitment was made, beyond general platitudes about their commitment to being “fiscal conservatives.”
    The biggest legislative achievement of Trump’s first term, the 2017 tax cuts, cost the government $1.5 trillion in revenue while benefiting primarily the rich. Vows that the tax package wouldn’t add to the deficit were set aside for vaguer predictions that over the course of several years the tax cuts would prove to be revenue neutral. Promises that it would pay for itself eventually disappeared as well.
    The budget-busting continued through several end-of-the-year appropriations deals. Only within the last year or so has Republican murmuring picked up again about their alleged distaste for government spending. When Trump’s reelection still appeared salvageable, Senate Republicans agreed to upwards of $2 trillion in COVID-19 response and economic stimulus.
    Yet a Senate GOP interest to stand up to big White House spending demands began to reemerge in the final weeks of a campaign, when President Trump was consistently several percentage points down in the polls and in spite of a global pandemic that was hobbling the U.S. economy in historic ways.
    Republicans who were, either publicly or privately, finally willing to put some daylight between themselves and the President pointed to his big spending ways as something with which they supposedly never fully agreed.
    McConnell made clear that his caucus would not sign on to the size of the COVID-19 follow-up package the White House and House Democrats were negotiating, and rank-and-file Republicans began saying out loud that suddenly deficit spending concerns could outweigh the urgency of responding to the coronavirus.
    The newfound GOP focus on the deficit in the more recent coronavirus negotiations were aimed at laying a foundation to hamper the kind of government spending an incoming Biden administration might want to do, a Republican strategist told Bloomberg. It came with the acknowledgement that rediscovering fiscal concerns literally overnight might be politically untenable, so the seeds needed to be planted at least while a few months remained of the Trump presidency. During the campaign, Biden and his advisors stayed mostly mum on spending and deficit issues.
    In some ways, his campaign offered a blank slate, allowing voters to project their own desires onto it while leaving them free of commitments.
    But at least one offhand remark from a longtime adviser — former Sen. Ted Kaufman (D-DE) — suggested that the President-elect and his team may be vulnerable to these long-debunked talking points.
    “When we get in, the pantry is going to be bare,” Kaufman told the Wall Street Journal in August. “When you see what Trump’s done to the deficit … forget about COVID-19, all the deficits that he built with the incredible tax cuts.”
    “So we’re going to be limited,” Kaufman added.
    Yet, the Biden campaign has also signaled that its ambitions are on the scale of FDR.
    Both sets of comments came when polling projected that Democrats were likely to take over the Senate. The fact that Republicans significantly over-performed on those expectations further complicates Biden’s calculus in how he navigates the demands that deficit concerns outweigh all else. To wit, before the the presidential race was even affirmatively called in Biden’s favor, top Trump allies were fear-mongering around debt to take the possibility of lame-duck COVID-19 relief off the table. “Trump does not want the last thing he does in office a $2 trillion debt spending bill. We want Biden to own that, not Trump,” Stephen Moore, a top Trump advisor, said Thursday. Whether Biden gives austerity-based concerns the light of day is up to him and his advisers. But President Obama warned in 2016 that Democrats will be “doomed to keep on making more and more mistakes” so long as politicians “can’t puncture some of the mythology around austerity politics.” Defeating the deficit hawks outright is likely now off the table for Biden. Puncturing their mythology is perhaps the best he’ll be able to do.

    1. The Rage

      Won’t work. This isn’t 2009 and growth will zoom back with the deficit crashing faster than the era of veggie burgers. Mitch is on the verge of making a huge mistake.

  11. JohnH

    Interesting piece by Michael Hirsh at Foreign Policy Magazine: “Economists on the run:”

    “Paul Krugman and other mainstream trade experts are now admitting that they were wrong about globalization: It hurt American workers far more than they thought it would. Did America’s free market economists help put a protectionist demagogue in the White House?”

    I spent years making the main points of this piece over at EconomistsView, only to be ridiculed by pgl and the other Very Serious People there.

    Now hopefully economists will also start incorporating the nefarious effects of “free” trade on government revenues and inequality—tariff revenues were lost and profits were shifted offshore, where they avoided taxes, contributing mightily to increased corporate earnings, investor returns, and inequality. Simplistic models used to justify “free” trade to the public conveniently ignored these effects and are still rarely discussed as an enormous giveaway to the 1%.

    1. pgl

      JohnH will deny this but we ridiculed his insistence that the fiscal austerity of the UK Cameron era helped workers by driving up real wages even though real wages had declined during this period. JohnH’s “reasoning” was that anything that lowered inflation had to push up real wages never recognizing the well documented fact that nominal wages fell – a lot. Who said so – Simon Wren Lewis who knows a lot more about the UK economy than a village idiot like JohnH.

      But JohnH wrote literally thousands of comments declaring he was right. The usual version was that after a period where real wages fell by over 10%, a 2% increase in a latter period was proof that austerity was good for workers.

      Yes – he is that incredibly stupid. And dishonest. The Usual Suspects here have a new comrade!

    2. pgl

      I actually read this discussion and was happy to see the references to the work of David Autor and Dani Rodrik. I mentioned their work quite often back in the EV days but I guarantee that JohnH does not remember this as he was always too busy hyperventilating his usual anger. But let me cite this:

      “Part of the problem is that, back in the ’90s, when the post-Cold War consensus was just emerging, economists tended to take a simplistic either-or view of trade—either you were a free trader or a protectionist—and forced people to choose sides. Krugman was one of them, adopting by and large the free trade position, which was ironic considering that his Nobel-winning work in economics was far more nuanced than his books and columns (and actually helped lay the intellectual foundations for smart strategic trade policy). Yet there were others in the policy debates—such as Rodrik, Reich, and Laura D’Andrea Tyson, who led former President Bill Clinton’s Council of Economic Advisers—who were far more worried about rapid globalization. They dared to question the pro-free trade consensus or at least, in Tyson’s case, to push for government-led industrial policy that would sharpen American competitiveness at a time when, after the Cold War, many newly liberalized nations were piling into the global economy at a great rate. This idea also was anathema to Krugman.”

      This last line is so unfair to Krugman as he never was one of those free trade makes every one better off clowns. But hey – some people have to pretend Krugman is some sort of evil person.

      1. Moses Herzog

        What gripes my butt is Krugman never gave credit to Barkley Junior for his Nobel Prize. He mentioned many peers whose work was a supporting pillar to his own in his Nobel Prize acceptance speech, but never mentioned Junior. I gotta tell you, it’s very very offensive. Someday they will recognize Junior’s greatness for being the first economist to exclude SAAR tabulations after a major recession. After a major downturn from the prior year you just want to measure the quarter to quarter change because everyone knows everyone is suffering by then. At that point you don’t care if the economy went down 30%, you just wanna know the monthly consumption changes after the major downturn. It’s like Einstein said: “Everything is relative, except between years, because you won’t notice the change if it was before this last quarter”.

        1. Barkley Rosser


          We are still waiting to see what your prediction for the shape of GDP pattern over this year would be. I said it would be a V that would fllatten, and I was right, and also the first person here to say it. You gave me a lot of crap about that, but I was right. You might as well go complain to the taxpayers of Virginia for paying somebody who keeps insisting that 2+2 = 4.

          Anyway, you have been challenged numerous times now to put up or shut up on what you forecast for the GDP pattern for the year. You continue to do neither.

          1. Moses Herzog

            @ Barkley Junior
            You got your written record here on the blog HALF right. You said it had a very good chance to be a “V”, then said it was in fact a “V”, then changed your story roughly 8 weeks after the blind Lemur monkey isolated in a cage and being used in Ebola biomedical trials knew it wasn’t going to be a “V”. Did you want me to show your predictions on 2nd quarter GDP?? I’m happy to list those for anyone curious about your forecasting skills. I’m even willing to put the number alongside my “call” on 2nd Quarter GDP. Let me know here in the thread if you wanna see that. I’m very happy to list your dozen or so comments you made on that.

          2. Barkley Rosser


            You are lying again. I never went back on my claim it was going to be a V that would flatten (somehow you always leave that part off when you cite this). I was right.

            If you are going to drag in numbers discussions, in fact I was right, although at times I used month to month and end of quarter to end of quarter rather than official SAAR. You have gone on endlessly about how everyone must use official SAAR? even as much of the US media does not and many commenters here have both criticized using it.

            Again, of course, we still do not have your pattern forecast, even as you now attempt to lie about mine. You are really completely worthlessly off the wall. When are you going to get it that people here, everybodh avtually, is just completely disguested with this trollish garbage out of you?

            Put up or shut up, and frankly it is time you did the latter given your repeated failure to do the former.

          3. Moses Herzog

            @ Barkley Junior
            Let’s revisit the record, for the millionth time, shall we?? This gem from the great Barkley Junior on June 17:
            “If this continues even somewhat, we may see what I had pompously dismissed numerous times here, that V-shaped recovery pattern, with most of the economics profession also being skeptical on this point. At the top of this surge are some sectors that may represent one-time buying, such as furniture. But other sectors may continue to see strong sales increases. This is the largest part of consumption, which is the largest part of GDP. It may well end up that growth in May and June will offset the sharp decline in April, leading to a situation of net positive GDP growth in the second quarter, and thus no recession in the journalistic sense of two consecutive quarters of net economic decline. “

            I’m looking for the phrase “flattening out”. And I’ll be damned if I can’t find it anywhere in that comment. Isn’t that “strange”?? Of course when Barkley is all over the map in his predictions. One time calling a ” J”, one time calling a “W”, most of the time calling it a “V”, it leaves the ever perfect Barkley just enough room, later, when enough time has gone by, to say he “originally” predicted this, or “never said” that.

            If only people like IHS Markit, the different Federal Reserve regions, CBO, blue chip forecasters and others Barkley Junior was criticizing for their 2nd Quarter GDP predictions being “too low” had the luxury Barkley does. And then after they were wrong, saying after 30+ years teaching economics the idea of SAAR in headline GDP numbers was a new concept to him.

          4. Moses Herzog

            Another thing Harry Dunne in Harrisonburg VA has a very difficult time in figuring out, is if he’s working overtime in criticizing Federal Reserve Nowcast numbers, IHS numbers, CBO numbers, Jeffrey Frankel, on and on and on and on and on (they were all in the same ballpark) then if he gives an alternative number he MUST also give the number using the same metrics they use—-NAMELY —–SAAR. And you know, I’m just twisted enough in my crazed mind to say, even Menzie Chinn would agree with me on this last point about metrics—that if you criticize someone else’s numbers as being wrong, then you should probably use the same metric—if that is the professionally accepted way, and the way that ALL of the people YOU are criticizing on their 2nd quarter GDP forecast are doing it.

          5. Barkley Rosser


            Sometimes I mentioned the flattening and sometimes I did not. But the V was correct even without it.

            As it is, we are still waiting for your incorrect projection that apparently was neither an L or a V. You still need to put up or shut up, but you continue to do neither. Total loser.

    3. not_really

      Cool story, bro.

      The Senate has mostly been run by “bootstrap” Conservatives bent on punishing the most vulnerable workers for being poor. The Right got the lightly regulated capitalist system they always wanted and enough not-rich people treat it like a religion that they gladly vote against their own best interests.

      That’s how American workers were harmed.

      1. Barkley Rosser


        You have a track record here of regularly saying things that are both stupid and ignorant. This statement is yet another of those.

        Do get it that trade (or more generally the current account) is tied to the capital account (or capital flows). They tend to offset each other. Saying one is more important the other is what I said in the first sentence above. Deal with it.

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