Trade Imbalance and IS-LM Analysis "Trade Imbalance and IS-LM Analysis"

The trade conflict between the U.S.A. and Japan is becoming an important economic problem for the both countries. The U.S.A. becomes a trade deficit country. On the other hand, Japan becomes an excess export country. In this paper, we will develop the balance of trade in the framework of IS-LM analysis and will consider the status in quo of the both economies. Then we will give some economic policies in order to improve the existing state of the both economies.

The trade conflict between the U.S.A. and Japan is becoming an important economic problem for the both countries. The U.S.A. becomes a trade deficit country. On the other hand, Japan becomes an excess export country. In this paper, we will develop the balance of trade in the framework of IS-LM analysis and will consider the status in quo of the both economies. Then we will give some economic policies in order to improve the existing state of the both economies.