"Politicians and commentators love to focus on the deficit, as if it were a scorecard of who wins the global trade, but the real measure is the total volume of trade. As economies develop, the trade, import and export. Exports help us to new markets and to develop economies of scale, while imports bless consumers with lower prices and more choices, while stoking competition, innovation and efficiency gains among producers. from this measure of BEA's recent trade report for December was good news around, and one more sign that the u.s. and global economies continue to recover from the great recession. Last year, U.S. exports of goods, which was 21 percent from 2008, while imports were 23 percent. In contrast, in the year of the recession of 2009, exports of goods decreased 18 percent from the year before while imports plunged 26%. (Unemployment increased in 2009, but hey, at least the u.s. trade deficit improve!) "MP: you've made this point before about the importance of adding exports and imports in total trade, see posts here and here. As shown in the above chart, top overall trade plummeted from 120 billion dollars due to global recession since mid-2008 to Summer 2009, and this was at a time when our monthly trade deficit "improvement" from the almost-70 billion dollars less than-30 billion dollars. Obviously, reducing the volume of total trade in 2008-2009 was a much better indicator of the economic conditions compounded by enhancing trade deficit. "
As Dan points out, when it comes to measurement of economic performance of the economy, the u.s., the most meaningful and relevant measure is "Total trade" and not the sense current "trade deficit" for goods and services (which is compensated by a surplus capital account). It is unfortunate that the total volume of international trade does not get more attention. Thank you Dan Griswold case.
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