My friend Jack Nicastro sent me this screen shot of something that he got from AI. It’s not terrible, but it does contain one significant error: I have never said that a “a deficit in trade goods is necessarily a surplus in capital flows.” I often do say that a deficit in goods and services is matched by a surplus of inward capital flows. But never would I – at least not intentionally – say or write anything that suggests that there’s any meaning in the economically meaningless concept of a trade balance (or deficit, or surplus) in goods alone.
(Technically, the surplus of capital inflows – a capital-account surplus – is the mirror image of a set of activities broader than just trade in goods and services. A capital-account surplus is the mirror image of a current-account deficit – not, strictly speaking, a trade deficit, which is only part of a current-account deficit. But the relative insignificance in the United States of other entries on the current account make these other entries ‘ignorable’ in order to gain clarity of communications with non-professional audiences.)
