Balancing International Trade: A comment on Professor Frisch's Paper.

The article comments on the underlying theory and the conclusions on economic policy derived from the proposals by Professor Ragnar Frisch for a thorough study of balance of payments broken down by countries and currencies. Several countries, short of foreign exchange, balance their imports by state control at the amount available from exports and other sources; any increase in exports enables them to import more, any decrease in exports forces them to import less. In the U.S., on the other hand, the volume of imports is determined by private importers independently of the reserve position of the country; the total volume of imports is below the level determined by national income and relative prices, and no change of exports would influence the actual volume of imports. In these conditions, discrimination against imports from the U.S. will increase world trade.