🚀 go-pugleaf

lets remember a few principles from economics...
the japanese trade surplus has nothing to do with
the openness or closedness of their markets. they could
have the most open market or the most closed market and
still run large trade surpluses. a trade surplus is a
product of macroeconomic fundamentals, namely a high
national savings rate. any country which consumes less
than it produces will run a trade surplus. as the
japanese society ages, we can expect the savings rate
to fall, and for japan to start running trade deficits.

while we may care whether we run a trade deficit or not,
a bilateral deficit is pretty meaningless in a multi-lateral
world. the us typically runs a trade surplus with australia,
australia runs a trade surplus with japan, and japan runs
a trade surplus with the us. in the long run there is no
reason to expect all bilateral trade to be balanced. this
is only necessary in the barter economies of the past when
you needed a double coincidence of wants.

linus yamane
dept of economics
wellesley college