all economic transactions that are made between countries. Among the items
commonly traded are consumer goods, such as television sets and clothing; capital goods,
such as machinery; and raw materials and food. Other transactions involve services, such
as travel services and payments for foreign patents. International trade transactions are
facilitated by international financial payments, in which the private banking system and
the central banks of the trading nations play important roles.
International trade and the
accompanying financial transactions are conducted generally toward the purpose of
providing a nation with commodities it lacks in exchange for those that it produces in
abundance; such transactions, functioning with other economic policies, generally improve
the standard of living of a nation. This article provides a historical and contemporary
overview of the structure of international trade and of the classic controversy over free
versus controlled trade.