Project Syndicate
https://www.project-syndicate.org/commentary/trump-economic-illiteracy-trade-war-by-jeffrey-d-sachs-2017-04?utm_source=Project%20Syndicate%20Newsletter&utm_campaign=c1427ae595-sunday_newsletter_4_3_2018&utm_medium=email&utm_term=0_73bad5b7d8-c1427ae595-93854061&barrier=accessreg
...The current-account balance, measuring the balance of trade in goods, services, net factor income, and transfer payments from abroad, is equal to national saving minus domestic investment. That’s not a theory. It’s an identity, save for any statistical discrepancy between gross national product (GDP) and gross national income (GNI). It’s true whether you are liberal or conservative, populist or mainstream, a Keynesian or a supply-sider. Even Trump and all his deal making can’t change that. Yet he is threatening a trade war because of deficits that reflect America’s own saving-investment imbalance.
A country runs a current-account deficit if investment exceeds national saving, and runs a surplus when investment is less than national saving. For a country with a balanced current account, a deficit can arise if its investment rate rises, its saving rate falls, or some combination of the two occurs.
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