Bactra Review   Pop Internationalism

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More precisely: If a country runs a trade surplus, its exports exceed its imports, and the claims it acquires on resources in other countries exceed those other countries acquire on its own. Either it increases its stock of foreign currencies, or it exports capital, in effect advancing credit to its trading partners to let them buy its goods. Conversely, a country with a trade deficit either runs down its reserves of foreign currencies, or takes out loans from other countries (to a greater extent than it lends to other countries). This is really just an accounting identity, a consequence of the way quantities like exports, imports, and net foreign investment are defined. I am ashamed to say that I learned the accounting identity at my father's knee (literally), but was unable to see that it made nonsense of lots of what I read about globalization.