# trade deficit Summary::A trade deficit occurs when a country's imports exceed its exports. --- What Is a Trade Deficit? A trade deficit occurs when a country's imports exceed its exports. A trade deficit is also referred to as a negative balance of trade (BOT). The balance can be calculated on different categories of transactions: goods (a.k.a., “merchandise”), services, goods and services. Balances are also calculated for international transactions—current account, capital account, and financial account. Clipped from [Trade Deficit: Definition, When It Occurs, and Examples](https://www.investopedia.com/terms/t/trade_deficit.asp) at 2024-03-31. --- The concept of trade deficits and [[trade surplus|trade surpluses]] represent one of the more questionable concepts in classical economics. First, if exchanges are made in which both parties receive something of value more than what they give, the idea of surpluses and deficits seem impossible. Second, the goods exported and imported cannot be aggregated. The only measure for imports and exports consists of dollars exchanged. We all know that dollars do not represent a measure of value. The subject needs to be examined much more in depth. ## References / Links The trade balance is the difference between the value of exports of goods and services and the value of imports of goods and services. A trade deficit means that the country is importing more goods and services than it is exporting; a trade surplus means the opposite. Clipped from [Current Account Deficits](https://www.imf.org/en/Publications/fandd/issues/Series/Back-to-Basics/Current-Account-Deficits) at 2023-07-16. A page on the international monetary fund website. ## Publication [Trade Deficits, An Introduction](https://freemarketcenterjournal.com/2023/07/10/trade-deficits-an-introduction/) [[Trade Deficits (Note)]] ## Individual Transactions The definition of “[[Trade Deficit - Definition]],” as normally stated, presumes that the nation trades as a monolithic entity. ***Trades***, however, do not occur between nations. Trades occur between individuals within nations. I repeat. Aggregating the amount of money that crosses international boundaries provides no useful information about the benefits of individual trades. --- # References [[What Happens to the Money from Trade]] [[Trade Deficit - Definition]] [[Trade Deficit tosses cold water on gold party]] Trade deficits: a concept without merit. I claim that this term has no merit or meaning because one of voluntary transaction occurs each party values what they get more than what they give. No way exists to measure the one of the parties feels like he got a better deal than the other party feels. Also the calculation of trade deficits refers to a nation as if it were a monolithic trader. ## Notes Consumers ultimately pay all costs. Anything that favors one group of suppliers over another will ultimately be paid for by consumers. Posted::[[Trade Deficits, An Introduction]]