Macroeconomics › Section J · International trade and capital flows › Topic J.4
The national saving and investment identity
Why does the United States run trade deficits year after year, while Germany runs surpluses? One line of accounting answers much of it: a country's trade balance equals what it saves minus what it invests.
In this topic
- Trade as a macroeconomic question
- Supply and demand for financial capital
- Where the identity comes from
- National saving minus investment
- Terms that can switch sides
- Worked example: finding the trade balance
- Worked example: starting from GDP
- One factor at a time
- An identity, not a theory
- Common mistakes to avoid
- Key takeaways
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