Tradables

Tradables are goods and services that can be bought and sold across borders. In macroeconomics, they are contrasted with non-tradables, which are consumed domestically and are not easily traded internationally due to costs, regulations, or other frictions.

Examples of tradables include manufactured goods, agricultural commodities, energy resources, and many digital products or services that can be delivered remotely. Non-tradables include housing, local services (such as restaurants and haircuts), utilities, and other items produced primarily for local consumption.

The degree to which an item is tradable depends on factors such as transport costs, tariffs, regulatory barriers, and the feasibility of cross-border delivery. Distance, technology, information flow, and institutional frameworks also affect tradability. Countries with large tradables sectors are typically more exposed to global price movements and exchange-rate fluctuations, since world prices influence domestic prices for tradables more directly.

Economic implications of the tradables/non-tradables distinction include influences on inflation, wage setting, and monetary policy. For example, changes in the exchange rate can alter the competitiveness of tradables, while non-tradables tend to be more influenced by domestic demand and productivity. The distinction is used in macroeconomic analysis and policy discussions, including models that examine the Balassa-Samuelson effect, which links productivity differences between sectors to relative price levels across economies. Overall, tradables play a central role in globalization, international trade, and a country's exposure to global markets.