Wednesday, January 18, 2006
America's Maligned and Misunderstood Trade Deficit
America's Maligned and Misunderstood Trade Deficit Very good article that explains the concept of trade balances. Before reading this article i never knew that there are two different account maintained (current account and captial account). The following fundamental equation makes a lot of sense once you read the article:
Savings - Investments = Exports - Imports
Savings - Investments = Exports - Imports