More trade deficit confusion

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  • #17733

    In a book that I’m reading it says:

    “The Commerce Department’s Bureau of Economic Analysis (BEA) is the government agency responsible for measuring the balance of trade. According to the BEA, in 2008 the trade deficit measured approximately $696 billion. This total trade deficit was composed of an $840 billion trade in goods deficit combined with a $144 billion trade in services surplus.”

    I heard somewhere else that the $696 figure comes from approximately 1.8 trillion in exports minus about 2.5 trillion in imports.

    So then, which is it?

    #17734
    tatefegley
    Member

    I don’t think they are contradictory. The latter source must just classify both goods and services in their calculations of “imports” and “exports.”

    #17735

    That sounds fair, but why would both calculations come out to be $696 billion? Wouldn’t the two separate totals at least be a little different?
    Thanks for helping!

    #17736
    jmherbener
    Participant

    Here’s a simple breakdown of the balance of payments account:

    http://www.newyorkfed.org/aboutthefed/fedpoint/fed40.html

    As it explains, since 1993 merchandise and services are combined into the trade deficit or surplus, which is calculated as exports minus imports. So the two calculation you refer to give the same result.

    #17737

    Thank you!

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