3. Temporary imbalances. A third category of trade is a subset of item 2 which is
important for shipping. Temporary local imbalances create a price differential
between local and overseas products. This type of trade often happens during
business cycles when, for example, shortages of chemicals, petroleum products or
steel products result in imports of commodities, even if they can normally be
manufactured competitively at home. However, cyclical patterns of trade also occur
over much longer periods as economies develop, which we will refer to as the ‘trade
development cycle’.