tag:blogger.com,1999:blog-2546602206734889307.post5842258853220147464..comments2024-03-28T04:29:22.717+00:00Comments on mainly macro: The Brexit depreciation and exportsMainly Macrohttp://www.blogger.com/profile/09984575852247982901noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-2546602206734889307.post-24782782077963371522017-04-24T09:25:20.269+00:002017-04-24T09:25:20.269+00:00Simon, have you commented on Ben Broadbent's a...Simon, have you commented on Ben Broadbent's analysis? He agrees with you that the shift in the pound's exchange rate is a reaction to the NEGATIVE permanent terms-of-trade shock that is expected to hit in 2019. The economy will therefore rebalance with a shrinkage in the tradeables sector. Note though that this means that an actual or expected weakness in domestic demand is not the cause, and is not supported by data either. <br /><br />However, he thinks there is a greater chance that exporters, particularly less EU-focused ones, do take advantage of bumper profits and investment increases (though perhaps this will be to trade more with China, Japan, Korea, Canada, and the U.S. rather than the EU)UberDavehttp://uberdaveblog.wordpress.comnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-29642443880843801812017-04-18T10:50:46.230+00:002017-04-18T10:50:46.230+00:00I believe we are missing the whole point Prof.
In...I believe we are missing the whole point Prof. <br />In my opinion (1) the recent value of the sterling isn't a depreciation but rather a correction; we can talk about depreciation once we see parity with the under extinction euro, (2) for Brexit to have any meaning we should be expecting parity.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-40041960104317246862017-04-12T13:52:02.639+00:002017-04-12T13:52:02.639+00:00I bought a lot of €URO the day before the referend...I bought a lot of €URO the day before the referendum.<br />Did you?<br />If not - why not ???StuartPhttps://www.blogger.com/profile/13748038209546648459noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-54837988204936709462017-04-12T12:54:56.246+00:002017-04-12T12:54:56.246+00:00Thank you for this post. Is it really true that cu...Thank you for this post. Is it really true that currency depreciation doesn't facilitate export growth? The effective exchage of the Pound and export growth are highly (negatively) correlated. So some (temporary) Impact seems to be there..Dan_Hhttps://www.blogger.com/profile/12154651882981387729noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-23463303720693188822017-04-11T19:15:33.891+00:002017-04-11T19:15:33.891+00:00I suspect Krugman is right with tariffs. They are ...I suspect Krugman is right with tariffs. They are a complete red herring. Import tariffs are paid by the consumers of the area running up the protection - particularly with floating rate exchange rates. <br /><br />If we have a government that says that the float will deal with any external imbalances - and stops paying income on capital assets to foreigners - then you will get the necessary adjustment. Dropping the external food tariff allows us to get our food from anywhere on the planet, and we then grow locally for security (which requires that you farm socially, not at market value. Much like you don't run an army at market value).<br /><br />As soon as one import nation works out the secret and<br />starts using its currency power to get stuff in return for nothing,then the WTO will collapse. It is after all based upon the myth of free trade being good for everybody.<br /><br />It won't be the UK though. The Tory party is still in Victorian<br />thinking mode and would defend free trade to the death - even though it only works when you're raiding other countries for their resources and have them locked in a Sterling standard.<br /><br />Keyne's highlighted it early on in one of his papers - surplus nations draining circulation from other nations. Post Keynesians want to solve it the way Keynes tried to - with a big international hug club. That won't work for the reasons the UN doesn't work and the reason the Libertarian 'non-aggression pact' won't work.<br /><br />The world needs a mechanism that a country can apply unilateral that gives it the necessary degree of freedom to pursue its own policy - in the face of sanction, currency manipulation and all the other tricks other countries can throw at a nation.<br /><br />There's a number of things you can do to stop asset hoarders draining your circulation that then allows them to keep their own exchange rate down and steal your aggregate demand.<br /><br />1) Taxation is one option. The rule could be that any country running a trade surplus to the UK is taxed at 100% on any UK investment income or capital gains in Sterling owned by its citizens. Which would deal with all the tax havens instantly.<br /><br />So essentially you can earn income from the UK as long as you don't save it or use it to drive up UK asset prices.<br /><br />2) Cancellation is another.<br /><br />3) 30 days notice to spend their £'s on UK goods and services or lose it.<br /><br />4) Or you can accommodate the " Sterling savings" via the UK government purchasing the goods and services the exporters to the UK doesn't want to buy. Then deploying it for the public good and public purpose.<br /><br />Option 4 is of course the MMT approach.<br /><br />The point being you make it as uncomfortable as possible for trade surplus nations to hoard your assets. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-1087079694902674212017-04-11T17:24:02.289+00:002017-04-11T17:24:02.289+00:00But exports have been boosted and the trade defici...But exports have been boosted and the trade deficit has narrowed:<br /><br />https://www.poundsterlinglive.com/economics/6493-uk-current-account-deficit-at-lowest-in-years<br /><br />"UK Current Account Deficit Falls to Lowest Level in Years as UK Exports Rise "Britonomisthttps://www.blogger.com/profile/12221647029208839668noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-76248863067820514722017-04-11T14:14:20.145+00:002017-04-11T14:14:20.145+00:00I have just read "BBC ‘Brexit bias’ claims ne...I have just read "BBC ‘Brexit bias’ claims need to be based on hard evidence" March 23, 2017 through your last post.<br /><br />Surely the graph showing 71% of politicians appearing on the TV news across the campaign were Tories puts an end to anyone claiming this fatuous referendum has anything like legitimacy.<br /><br />To the view that never have so many people voted for one movement in British politics, producing 51.8%, comes that resounding figure of 71% Tory, adequately explaining why World War Three versus immigrants with HIV was the best this country offered up.<br /><br />Anonymousnoreply@blogger.com