It's a stark reminder: trade imbalances are a symptom of income distribution ailments in the major economies, which disempower the labour and household sector, especially the low-income. Trade war...
Tariffs and currency devaluation affect trade balances not by changing the relative prices of tradable goods but rather by shifting income from households to businesses, thus forcing up the savings rate. Because of this, any policy aimed at making an economy more competitive internationally by suppressing wages is effectively a beggar-thy-neighbor policy.
It's a stark reminder: trade imbalances are a symptom of income distribution ailments in the major economies, which disempower the labour and household sector, especially the low-income. Trade war could even further exacerbate the problem.
Pettis also debunks common misconceptions about trade imbalances.
It's a stark reminder: trade imbalances are a symptom of income distribution ailments in the major economies, which disempower the labour and household sector, especially the low-income. Trade war could even further exacerbate the problem.
Pettis also debunks common misconceptions about trade imbalances.