One of my favourite economists Robert Higgs, recently blasted the idea of even collecting international payments data saying “the world would have been a happier place had the data never been devised, popularized (in a rough way), and used by policy makers.”
Dr. Higgs goes on to say:
“The whole nasty business of international-balance-of-payments politics exists entirely because rent-seekers exploit the public’s ignorance of economics to prop up their activities with a superficially appealing but completely baseless rationale. They then reward politicians who play along with this shameful hoax. After centuries of mercantilist nonsense, it is well past time that people demanded that the international balance of payments be consigned to the dust bin of history along with the predatory politics of subsidies, tariffs, and other trade barriers that such data chronically serve to support.”
Read his article here…
In is article, he also points to Professor Don Boudreaux at Cafe Hayek as one of his go to guys on this subject.
You can read Dr. Boudreaux’s pithy posts about trade here…
To paraphrase Dr. Boudreaux, we don’t measure the trade between New Providence and and Eleuthera, or see that obvious imbalance as a problem, why do we see a trade deficit with another country as detrimental?