On the Structure of Steady State Trade Equilibrium,
Abstract
The paper is concerned with the problem of trade imbalance, that is, trade situations in which the value of imports and exports of a given country are not equal (such an imbalance is called a trade deficit or surplus according as imports are greater than or less than exports). Traditional trade theory appears to assert that in the long run the conditions of economic equilibrium imply that each country's trade configuration must approach balance so that its exports are sufficient to pay for its imports. The purpose of this paper is to show that the implied assertion is incorrect, and that the forces of equilibrium will not, except by coincidence, bring about a trade balance in any country. It is shown instead, that in a steady state equilibrium some countries end up being perpetual net importers and others perpetual net exporters. (Author)
Document Details
- Document Type
- Technical Report
- Publication Date
- Dec 01, 1971
- Accession Number
- AD0735929
Entities
People
- David Gale
Organizations
- University of California, Berkeley