Import
In economics, imports are the transportation of foreign goods and services, which are purchased by a country for distribution within it. Imports can be any product or service received within the border of a national State for commercial purposes.
Favorable and unfavorable effects
Imports allow economic agents to acquire products that are not produced in their country, cheaper, or of higher quality, benefiting them as consumers. Importation is when one country buys products from another country. By importing cheaper products, money is automatically being released for agents to save, invest or spend on new products, increasing the tools for production and the wealth of the population.
But on the other hand, imports increase competition over the local industry of the importing country. Industries in exporting countries may have better, more favorable production conditions (highly-skilled labor population, greater technological development and/or better infrastructure) or lower wage costs (due to the payment of low wages to workers in the exporting country), according to some. economists, harming the internal economy in their labor market.
Imports and trade balance
The trade balance is defined as the monetary value of exported goods minus imported goods, and is therefore considered positive when exports exceed imports and negative when more is imported than exported. There is a close relationship between national savings, national investment and the trade balance. Taking into account the aggregate components of GDP:
PIBpm=C+I+G+X− − M{displaystyle GDP_{pm}=C+I+G+X-M,}
Where GDPpm is the gross domestic product accounted for in market prices, C is the total value of goods consumed, I gross capital formation (investment),G government spending or public consumption, X the value of exports and M the value of imports. From the previous identity it is trivial to derive the fundamental identity of the national accounts:
A− − I=X− − MΔ Δ savings− − investment=exports− − imports{displaystyle A-I=X-Mqquad Leftrightarrow qquad {mbox{ahor}-{mbox{inversions}}}={mbox{exports}}}-{mbox{imports}}}}}
