In the U.S. and (particularly) in euro countries, policies aimed at stimulating exports are (sadly) considered an effective response to lagging growth (U.S.) and recession (Euroland). Viewing a net export balance (i.e., an international trade surplus) as an economic virtue and a growth engine is a relic of Mercantilism that has had a powerful comeback, not coincidentally, with the abandonment of fiscal policy as a counter-cyclical tool.MEPOC — Mosler Economic Policy Center
Do exports LOWER a nation’s living standards?
Andrea Terzi | Professor of Economics at Franklin College, Lugano, Switzerland
Brilliant!
ReplyDeleteSlogan to add to PR:
You can't export your way to prosperity.
Note: You can but it depends on your nation's circumstances
Reading such a blazing clear "statement of the bleeding obvious." It really makes me question the mental health of neoclassical mainstream economists.
ReplyDeleteAny fool can see if you consistently give away more valuable goods than you receive in return.....you are on a losing proposition.
It would be a less bad deal if the thought process was. Real goods today in exchange for your assets or lucrative future claims. But they mainly accumulate treasuries. So when are the Germans, Chinese and Japanese going to cash in? Come on...When eh???
If/when they do decide to cash in their chips, they will find the Anglo's have done a "Watusi shuffle" (tr:switcheroo) and their financial claims are severely impaired. Who will be laughing?
Why do the collective brains of so many highly educated people turn to jelly when confronted with relatively straightforward concepts like national accounts.
For Frau Merkels benefit this is how to dance the Watusi properly.....
http://www.youtube.com/watch?v=vgyxb2lzjtU