Exchange Rates and the Balance of Payments
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Why currency devaluations are losing economic punch | Microeconomic Insights

Why currency devaluations are losing economic punch | Microeconomic Insights | Exchange Rates and the Balance of Payments | Scoop.it
Competitive devaluations are again becoming a popular macroeconomic policy. For example, a competitive devaluation was one of the three pillars of Abenomics, the economic policy of Shinzo Abe’s administration to fight secular stagnation in Japan. It was also discussed as a potential tool for debt-ridden southern European countries, had they been able to abandon the euro.

But while Japan reduced the value of the yen by 50 percent relative to the US dollar between 2012 and 2015, the impact on trade and employment was underwhelming. The Economist derided the policy as an “uncompetitive devaluation.”[1]
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Michel Charvolin's curator insight, May 24, 2017 3:40 AM

Send money overseas easily and securely, with bank-beating exchange rates:

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Germany’s current account surplus – a concern?

Germany’s current account surplus – a concern? | Exchange Rates and the Balance of Payments | Scoop.it
In the media a lot is spoken of a country’s trade deficit and the concern that it is borrowing from abroad to finance current purchases of goods and services. China’s surpluses have been a big talking point but it is Germany with a current account surplus since 2002 (introduction of the Euro) with a 2105…
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Egypt allows its currency to float freely - BBC News

Egypt allows its currency to float freely - BBC News | Exchange Rates and the Balance of Payments | Scoop.it
Egypt is floating its currency in a move that has reduced its value by almost 50% against the dollar.
Mr Christopher's insight:
From managed to floating. Why?
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The danger of Germany's current account surpluses: Results of CFM and CEPR Survey | VOX, CEPR’s Policy Portal

The danger of Germany's current account surpluses: Results of CFM and CEPR Survey | VOX, CEPR’s Policy Portal | Exchange Rates and the Balance of Payments | Scoop.it
Germany posted a record-high current account surplus of 8.5% of GDP in 2015; indeed, the German surplus has overtaken China’s surplus as the largest in the world. Germany’s current account was slightly in deficit when the euro was created in the late 1990s, it steadily increased in the early 2000s and has continued to rise since the Global Crisis of 2008. Since 2010, the increase in the current account has been accompanied by fiscal surpluses, with the German government moving from a deficit of 4% of GDP in 2010 to a surplus of 1.2% in the first half of 2016.
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Less than one euro to the pound at many UK airports - BBC News

Less than one euro to the pound at many UK airports - BBC News | Exchange Rates and the Balance of Payments | Scoop.it
Many travellers buying foreign currency at some of the UK's airports are now receiving less than one euro to the pound.
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The crash in the pound punctures the delusion that Brexit Britain will flourish | Aditya Chakrabortty

The crash in the pound punctures the delusion that Brexit Britain will flourish | Aditya Chakrabortty | Exchange Rates and the Balance of Payments | Scoop.it
There’ll be no boom outside the EU. With a paltry manufacturing industry, we can’t pay our way. And it will be the poorest who suffer most
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Why the UK's current account deficit has economists spooked

Why the UK's current account deficit has economists spooked | Exchange Rates and the Balance of Payments | Scoop.it
Mr Christopher's insight:
Easy to read analysis of why CA deficit is a problem
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Calculating Prices in different Currencies using Exchange Rates

If you know the exchange rates of two currencies, you can calculate the prices of goods in one country in another country's currency. This lesson walks you t...
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If Britain’s 'other deficit' doesn’t worry policymakers, it certainly should - Telegraph

If Britain’s 'other deficit' doesn’t worry policymakers, it certainly should - Telegraph | Exchange Rates and the Balance of Payments | Scoop.it
The UK's current account deficit is the largest in the developed world, with
growing worries about how it is financed
Mr Christopher's insight:

Put simply, Britain is living well beyond its means, as indeed it has for a long time now.

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CBI tells chancellor: do more to boost trade and rebalance economy

CBI tells chancellor: do more to boost trade and rebalance economy | Exchange Rates and the Balance of Payments | Scoop.it
Before George Osborne's budget, business lobby group says UK remains too dependent on consumer demand
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UK lives too high on the hog (again)

UK lives too high on the hog (again) | Exchange Rates and the Balance of Payments | Scoop.it
How worried should we be by the UK's record current account deficit, our inability to pay our way in the world?
Mr Christopher's insight:

Great for downsides of a current account deficit

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MAP: Every Country's Highest-Valued Export

MAP: Every Country's Highest-Valued Export | Exchange Rates and the Balance of Payments | Scoop.it
Australia makes the most money from coal.
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China should stop intervening in FX market and let yuan float: researcher

China should stop intervening in FX market and let yuan float: researcher | Exchange Rates and the Balance of Payments | Scoop.it
China should stop intervening in the foreign exchange market, devalue the yuan and let it float freely to restore stability, a senior researcher at a government-backed think tank said.
Mr Christopher's insight:
Geoff Riley's insight: Will the Chinese government ever countenance a free-floating Yuan? To what extent is a managed exchange rate a key part of the Chinese economic model and one that other emerging countries are keen to follow?
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Can you predict exchange rates?

Can you predict exchange rates? | Exchange Rates and the Balance of Payments | Scoop.it
In new research Pınar Yeşin examines the IMF's success in medium-term exchange rate prediction.
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Eurostar Sees Christmas Rush to London as Pound Lures Parisians

Eurostar Sees Christmas Rush to London as Pound Lures Parisians | Exchange Rates and the Balance of Payments | Scoop.it
Eurostar International Ltd. said the pound’s decline against the euro following Britain’s vote to quit the European Union is stimulating tourist travel to the U.K. and helping to offset a decline in demand for visits to Paris and Brussels following terrorist attacks there.
Mr Christopher's insight:
There's winners and losers here.
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Bitesize: Mapping the UK’s trade

Bitesize: Mapping the UK’s trade | Exchange Rates and the Balance of Payments | Scoop.it
Jonathan Fullwood. With trade negotiations apparently looming, one may wonder with whom the UK trades most. Given the geospatial aspect of the data, perhaps a map may help. Even better, how about a cartogram? Cartograms can be formed by distorting a map so that the areas of countries correspond to the relative values of some…
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British shoppers told to expect price rises after steep fall in pound

British shoppers told to expect price rises after steep fall in pound | Exchange Rates and the Balance of Payments | Scoop.it
Former Sainsbury’s boss Justin King says retailers will need to pass on to UK consumers the cost of importing goods
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Devaluation is a dangerous game. But Britain may have to try it

Devaluation is a dangerous game. But Britain may have to try it | Exchange Rates and the Balance of Payments | Scoop.it
Our balance of payments situation is so poor that a 10% weakening in sterling would be no bad thing – if there were not such a risk of things getting out of hand
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More buyers wanted

More buyers wanted | Exchange Rates and the Balance of Payments | Scoop.it
Exports continue to disappoint, even in sectors where Britain should do well
Mr Christopher's insight:

What's wrong with UK exports?

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What does China own in the UK? - BBC News

What does China own in the UK? - BBC News | Exchange Rates and the Balance of Payments | Scoop.it
The UK is one of China's favourite global destinations for investment, but where exactly is all this money going?
Mr Christopher's insight:

If there's a deficit on the current, there has to be a surplus on the capital account and guess what happens to all those export dollars?

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Global Trade graphic

Global Trade graphic | Exchange Rates and the Balance of Payments | Scoop.it
Below is a very informative graphic from The Economist outlining global trade. Interesting to note the dependence on trade of Singapore and Hong Kong. They make the point that the number of regiona...
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The Trade Deficit Doesn't Cause Unemployment

The Trade Deficit Doesn't Cause Unemployment | Exchange Rates and the Balance of Payments | Scoop.it
Dean Baker has been rather taken out behind the woodshed and given a good spanking by several economists. The point at issue here is whether the trade deficit causes unemployment or not. And the answer is that it doesn't. Trade doesn't have any effect upon employment or unemployment in general [...]
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Evaluation

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