In doing so, it helps not only in the present but in the future as well. In principle, this smoothing function can work in a few ways. One is through direct transfers to households and businesses. Another is for the government to spend money directly itself on activities that create jobs.
The trade balance does have a large share of the current account in many countries, but other components such as the income account often have non-negligible and sometimes significant impact on the overall picture of the current account balance (Chart 3).