Real Terms Of Trade: Imports Are Good And Exports Are Bad


YouTube has a short video Real Terms Of Trade: Imports Are Good And Exports Are Bad with excellent written introduction to support the video. I’ll just quote the first paragraph of the introduction.

Warren Mosler and Professor Stephanie Kelton discussing the real terms of trade. When we import something from a foreign country, we get the thing and they get dollars. When we export something to a foreign country, they get the thing and we get their currency. Which one is better for us? Imports are goods and services that we can consume but didn’t have to work to produce, while exports are goods and services that we had to work to produce but don’t get to consume. So from the point of view of our society as a whole, exports are a cost, while imports are a benefit.

We need to stop buying the major baloney that our politicians want to feed us about trade, and start thinking about and understanding the reality.

If you are tempted to reject what this video is saying, I suggest you read the article in my previous post Ignore the Trade Balance: Concentrate on Full Employment.

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