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>when somebody is injecting or removing money from the economy by some other means.

Which should be considered the normal state for an economy that with growth and production.

The issue is that a negative trade deficits are sustainable, but come directly out of the wealth growth of the importing country.

If you have $2 of value per year, and loose net $1 across the boarder, you never accumulate wealth.




That's a little flattened because oftentimes that $1 will go across the border in exchange for ownership of foreign assets.


Yes, but the principle is the same for how a perpetual deficit can be maintained.

A subsistence farmer can grow enough for themselves. It they make extra each year, they can buy something from outside each year, continually running an import deficit.


Wealth is not money.

No country accumulates money in any significant way. Neither loses it.


What are you talking about? Countries create and change the amount in circulation all the time.


No country accumulates external money. The Eurozone ones surely don't, because people mostly don't accumulate money (your bank doesn't hold a lot of it), and the ones that have their own money don't accumulate any impactful amount of reserves because those are expensive.


Im not sure how this relates to my point.

Im talking about wealth, GDP, capital, and trade. These things are measured in currency, but saying a country is hording a currency.

If country A uses all of its surplus production beyond subsistence to import alcohol from country B, and country B invests all that money on education, infrastructure, and productive capital, you would expect different outcomes.

Country A can humm along with a perpetual trade deficit forever, but there is an opportunity cost.


The entire thread is about currency. From the first post.

If you meant to talk about wealth, real GDP, and real capital, you can... you know... reference those things on your text. Because every single thing upthread is nominal and about money changing hands.

Do you want to know how Portugal can get a positive trade balance (a nominal concept)? They just need to kill tourism and the unbalanced inflow of salary and pensions. Just destroy their natural and cultural attractions and make the place so bad to live that no foreigners will want to go there. Easy.

Now, we can talk about opportunity costs...


I think you are confused by what a trade balance is. Someone coming to your country and spending money is not a trade deficit.

A trade deficit is buying more goods and services from outside than are sold outside.

I was trying to explain to you how a negative trade balance can be sustained, but it seems like you dont want to hear it.

Take care.




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