In 2016 the United States exported to Europe US$598bn worth of goods and services, and imported $698bn of goods and services. Minus some statistical discrepancies, European countries recorded the inverse flow of imports and exports.
For the past century, economists and policymakers have relied on this ‘balancesheet approach to economics to guide their decisions. One country’s exports are reported as another country’s imports. One company’s production shows up elsewhere in the economy as consumption, or investment, or inventories. The output of the world is the sum of the outputs of the individual countries.
The balance-sheet approach to the economy is well-suited to the physical world. Go back 100 years, and the economies of industrialized countries were composed of physical objects that we could easily count: millions of cases of canned American corn; millions of hectolitres of French wine; millions of metric tonnes of German coal; thousands of long tonnes of British steel ingots. These were tangible and real economic outputs.
