1/9
A lot of analysts seem to be arguing that the trade surpluses of certain countries have surged because those countries recovered early from Covid-19, and so are the only economies that can benefit from continued global demand. This way of thinking treats exports as...
A lot of analysts seem to be arguing that the trade surpluses of certain countries have surged because those countries recovered early from Covid-19, and so are the only economies that can benefit from continued global demand. This way of thinking treats exports as...
2/9
linear increments rather than as part of an economic system.
If their early recoveries from Covid-19 do indeed explain surging exports, in a well-functioning trading system these surging exports should in turn cause domestic shifts that also cause other...
linear increments rather than as part of an economic system.
If their early recoveries from Covid-19 do indeed explain surging exports, in a well-functioning trading system these surging exports should in turn cause domestic shifts that also cause other...
3/9
kinds of imports to rise (or other exports to drop). For example more exports overall should mean that more workers get paid, their consumption rise, and through various multipliers their imports should also rise. But in many of these countries we haven’t seen an...
kinds of imports to rise (or other exports to drop). For example more exports overall should mean that more workers get paid, their consumption rise, and through various multipliers their imports should also rise. But in many of these countries we haven’t seen an...
4/9
equivalent rise in domestic consumption, let alone imports.
Alternatively, a surge in exports would cause the currency to rise, the effect of which would be to shift income from manufacturers to households, the further effect of which should be a contraction in the...
equivalent rise in domestic consumption, let alone imports.
Alternatively, a surge in exports would cause the currency to rise, the effect of which would be to shift income from manufacturers to households, the further effect of which should be a contraction in the...
5/9
savings rate and, again, a rise in imports.
But when none of these or other equivalent shifts happen, it can usually be explained by policies that prevent the necessary shifts in income. For example to the extent currency appreciation is suppressed, or policies...
savings rate and, again, a rise in imports.
But when none of these or other equivalent shifts happen, it can usually be explained by policies that prevent the necessary shifts in income. For example to the extent currency appreciation is suppressed, or policies...
6/9
subsidize manufacturers – either directly, or by lowering credit, tax, logistical, and other costs – at the expense of households, the expected rise in imports as a consequence of greater exports will not happen.
subsidize manufacturers – either directly, or by lowering credit, tax, logistical, and other costs – at the expense of households, the expected rise in imports as a consequence of greater exports will not happen.
7/9
The point is that contrary to what many analysts are saying, the rapid increases in certain trade surpluses are probably not the direct consequence of ending Covid-19 early. They are more likely the consequence of mercantilist responses to Covid-19 (and the resulting...
The point is that contrary to what many analysts are saying, the rapid increases in certain trade surpluses are probably not the direct consequence of ending Covid-19 early. They are more likely the consequence of mercantilist responses to Covid-19 (and the resulting...
8/9
surges in trade surpluses were easily predictable several months ago, when in fact most analysts predicted trade imbalances would contract). You cannot treat exports discretely, as if they are detached from the economy and the overall trading system. Export earnings must...
surges in trade surpluses were easily predictable several months ago, when in fact most analysts predicted trade imbalances would contract). You cannot treat exports discretely, as if they are detached from the economy and the overall trading system. Export earnings must...
9/9
be recycled one way or another, and it is domestic policies that determine the ways in which they are recycled.
be recycled one way or another, and it is domestic policies that determine the ways in which they are recycled.
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