'The U.S. trade deficit unexpectedly increased in June to the highest level since October 2008 as a slump in exports exceeded a decline in shipments from overseas. The gap widened 4.4 percent to $53.1 billion from $50.8 billion in the prior month, Commerce Department figures showed today in Washington. The deficit exceeded all estimates in a Bloomberg News survey of economists in which the median was $48 billion. Exports declined the most since January 2009.'... http://www.bloomberg.com/news/2011-...y-widens-to-53-1-billion-on-export-slump.html
I do not know how many times I have heard people (not on this forum) back a few years ago when all the massive government spending really began to 'fight' the recession that a weaker U.S. dollar would help the trade deficit. Think again. Sure, exports are up. But imports are up more.
Two thoughts #1 Reduction of a trade deficit having postive effects on the economy only works through a Keynesian perspective (the exports raise demand). #2 Are you saying a stronger dollar would actually help the trade defict? How do you figure that is true? I mean, making american goods seem more expensive relative to foriegn goods would increase the deficit. Also, we know that deficit spending tends to increase trade deficits. When foriegnors buy government bonds, they must do that with dollars. Thus, more bonds being sold -> more demands for dollars -> stronger dollar -> more trade deficit
I am not saying it would or it would not. But I am saying that America has long been a net importer country. And, naturally, the more valuable the currency, the more goods that can be purchased for x amount of dollars. Whether it would help the trade deficit or not would, imo, depend on many factors; not just currency valuation. My point was that weakening the dollar by 'printing' more and more of it is not, imo, going to help America's trade deficit - as things stand today.
Back to acting like a troll I see Reiver. Well, I don't pay much attention to your posts anyway. So you can take your economic thesaurus and your condescending attitude and go try to put down someone else because your life is not what you wish it to be. Life is way too short to allow it to be brought down by people like you. Have a nice day.
Erroneousness based on nothing more than spurious relationship. That devaluation provides a means to narrow trade deficits is clear-cut obviousness. You'd only have a point if you suggested devaluation cannot solve a trade imbalance (given the consequences it could have on world economic stability)
The biggest problem with the Austrian wannabe approach is a basic misunderstanding over supply and demand. That's always going to hamper the attempt at logic. You could at least have given some comment over price elasticity of demand. That would have, at least, provided a level of validity
On hind sight...okay, I will bite: please provide a link to free, easily accessed and unbiased facts/statistics that support your position? Not theories - I am not in the slightest interested in more theories; whether from a Keynesian OR an Austrian Schooler or ANYONE. Just statistics/facts from unbiased, free, easily accessed sources (I say 'free' because the only time you have given me a link - it would have cost me $24 just to access it). Can you provide that...yes or no please?
I don't have to. Its in every textbook going! There may be short term losses, reflecting the nature of price elasticity of demand. However, in the long run we can refer to the importance of volume effects created by the changes in import and export prices. Its basic supply and demand! I refer to properly conducted published study. I've been able, for example, to grasp the obvious need for ceteris puribus. In terms of the analysis we don't have whimpish attack on basic supply and demand. As already remarked, we have important analysis into the US trade imbalance and how a devaluation isn't a solution
In other words - no (just as I assumed). When you have one or more to present - I shall probably read it. Until then...thank you and have a nice day.
If I could be bothered I'd giggle at your dispute of supply and demand. PS If you really wanted to try a dose of valid argument try and utilise the Marshall-Lerner condition
'Marshall-Lerner condition Definition noun a condition under which a change in a country’s exchange rate leads to a change in its balance of payments. In particular a devaluation will only be successful if volumes of trade are elastic to price changes. The idea was developed by Abba Lerner on the basis of propositions by Alfred Marshall.' http://www.economics-dictionary.com/definition/Marshall-Lerner-condition.html And where is your free link to unbiased facts/statistics that prove this condition? Do you have any - yes or no, please?
So the answer is, 'no'...again. Hey...I tried to give you a chance to provide just one link to just ONE shred of unbiased statistics/facts to back up your claims. But..as appears to almost ALWAYS be the case...none was forthcoming. I am afraid the conclusion is obvious until I have evidence to the contrary...you have none. And, no offense intended; but why you would think I would want to waste my time trying to prove or disprove some theory that I could care less about to someone whom I have virtually no respect for at this time (other then their vocabulary) is COMPLETELY beyond me. Have a nice day.
The answer is consistent: you have to attack the basic idea of supply and demand (and I wait to see it). Given you're typing without knowledge, you haven't yet realised that I've given you a means to at least offer some support for your argument (not entirely mind you as your original comment was based on nothing more than ignorance)
Whatever. Remember people...Reiver almost never backs up his claims with links to unbiased facts. Actually...never to my knowledge.