Saturday, December 8, 2012

Competitiveness: In search of balance?

Everyone (almost) understands that a consistent deficit in trade undermines an economy and eventually a state.

Look at Greece.

But also look at the UK, France and the US, some of the world mature yet champions of trade deficits economies in the world. Can they consistently make up their trade deficits via borrowing no matter how attractive they try to be for foreign investors (look at eg the UK)?

But is exporting "beggar thy neighbour" after all? Are too export driven economies not that stable after all? Look at Germany and China for example.

It is about a dynamic balance after all?

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