In this newsletter, we use a graph to look at the trade balance over time, map international trade flows using GeoFRED, and share techniques for improving FREDcast forecasts by diving into the components of GDP.
Trade Balance in FRED
This assignment provides instructions on building the graph below and provides suggested writing prompts for out-of-class assignments.
Using GeoFRED to Compare Exports across the U.S.
This assignment provides instructions on creating the maps below that show trade flows from U.S. states to China and Canada, respectively. You’ll also find prompts for in-class discussion.
Trade flows from U.S. States to China
Click on the map above to view an interactive version.
Now name the two states with the largest volume of exports to China in 2016.
In the interactive view, you can also see Alaska and Hawaii. Our apologies to Alaskans and Hawaiians for our map projection that makes it difficult to see all 50 states at once.
Trade flows from U.S. States to Canada
Again, click on the interactive map above and name the two states with the largest volume of exports to Canada in 2016. Looking at the two maps, which country is a larger export market for Texas: China or Canada? For California: China or Canada?
Using the GDP Components to Forecast Real GDP
The components of GDP determine its value. In the third quarter, a drop in exports resulted in a decrease in the GDP growth rate. Read on for more details and a list of resources to become a better FREDcast forecaster.
According to the Bureau of Economic Analysis, “Real gross domestic product (GDP) increased at an annual rate of 3.5 percent in the third quarter of 2018.”
“The deceleration in real GDP growth […] reflected a downturn in exports and a deceleration in nonresidential fixed investment. Imports increased in the third quarter after decreasing in the second.” https://www.bea.gov/news/2018/gross-domestic-product-3rd-quarter-2018-advance-estimate
Resources to become a better FREDcaster
- FRED® Blog: “The business behind the trade balance: Why trade deficits decrease in recessions and increase in booms“
- Economic Synopses: “Asset Prices and Their Effect on the U.S. Trade Balance”
- Economic Synopses: “The Rise in Chinese Tourism and Its Effects on the Balance of Payments“
- Page One Economics®: “International Trade“
Quiz Yourself on Different Measures of Trade
Q1. As of the last available observation, what type of good makes for the largest share of U.S. exports?
Q2. Compared with 1967, are today’s exports of foods, feeds, and beverages larger, smaller, or about the same?
Q2. Since 1967, which type of goods have increased their share of U.S. exports?
Q1. As of the last available observation, what type of good makes for the largest share of U.S. imports?
Q2. Compared with 1967, are imports of foods, feeds, and beverages in 2014 larger, smaller, or about the same?
Q3. Since 1967, which type of good has increased its share of U.S. imports the most?
Q1. As of the last available observation, is the U.S. running a trade surplus or a trade deficit in intellectual property rights services?
Q2. When were U.S. exports of intellectual property rights services at their lowest? When did they peak?
Now that you’ve aced this quiz, give it to your students using this dashboard. To customize this dashboard, just click the “Save to My Account” button at the top of the dashboard.