The problem with exports
Here's a partial list of the countries trying to export their way out of economic trouble: Germany. Japan. China. The United States of America. Malaysia. Thailand. The Philippines. South Korea. India, Brazil.
And that's really quite partial. On some level, everyone wants to export their way out of the woods. Sadly, as Simon Kennedy explains, there's a problem with this strategy: Everyone's exports are someone else's imports. One outcome here is that the strategy just doesn't work very well, and the current trade imbalances don't really change. Another, more worrying, outcome is that various countries resort to currency manipulation to get a leg up on the competition.
The good outcome, where countries that have big trade surpluses (think China) build up their domestic markets while countries with big trade deficits (like us) somehow multiply the size of our export markets, seems like the least likely of the three.
Posted by: robbiebruens | September 17, 2010 2:38 PM | Report abuse