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Britain already used its own currency, so they didn't have the same sort of 'Greece and Spain suffering to subsidize German exports' effect going on. So I don't

Britain already used its own currency, so they didn't have the same sort of 'Greece and Spain suffering to subsidize German exports' effect going on. So I don't think this particular issue will be different from before Brexit. ETA: It will matter if the City continues to dominate European financial transactions, because it is the tremendous amount of money that goes to the City which keeps the Pound priced above the levels that are good for manufacturing exports. If the multinationals all move to Hamburg or wherever, the Pound (probably) loses in value and British manufactured goods become more competitive on the global market. In theory. Possibly. Who knows?

patrickmcnamara 7y ago
Their goods would also be subject to EU tariffs depending on how trade talks go and the EU accounts for ~50% of UK trade iirc. So it's still very up in the air.
- mandevil 7y ago
  Yes. I am not an economist, and even if I were, there are so many moving parts to Brexit I could not begin to calculate which ones are the most important. But I do believe that financial exports (which is what the US and UK have specialized in since the Reagan/Thatcher era) create Dutch Disease just like natural resource extraction does, making the currency too valuable for high employment sectors and concentrating profits in low-employment sectors.
Zenst 7y ago
Yes the whole QE of the EURO by the ECB has been most dramatic and artificially kept the EURO competitive for the export market over the import market. That's one ticking time-bomb that they keep resetting with new QE initiatives, that will have to end soon and suspect BREXIT will offer a wonderful scapegoat opportunity that may well be availed. [EDIT ADD} Nice article highlighting the QE situation: https://www.ft.com/content/e4964f08-f196-11e9-ad1e-4367d8281195 https://www.ft.com/content/e4964f08-f196-11e9-ad1e-4367d8281... Also worth noting that negative interest rates seem to be the new tool that will replace/augment QE. Which may just work, though once again, perpetuating a mindset that borrowing over saving mentality in a way that whole generations will become saving avert. More so if/when negative interest rates take traction.

patrickmcnamara 7y ago

Their goods would also be subject to EU tariffs depending on how trade talks go and the EU accounts for ~50% of UK trade iirc. So it's still very up in the air.

mandevil 7y ago
Yes. I am not an economist, and even if I were, there are so many moving parts to Brexit I could not begin to calculate which ones are the most important. But I do believe that financial exports (which is what the US and UK have specialized in since the Reagan/Thatcher era) create Dutch Disease just like natural resource extraction does, making the currency too valuable for high employment sectors and concentrating profits in low-employment sectors.

Zenst 7y ago

Yes the whole QE of the EURO by the ECB has been most dramatic and artificially kept the EURO competitive for the export market over the import market. That's one ticking time-bomb that they keep resetting with new QE initiatives, that will have to end soon and suspect BREXIT will offer a wonderful scapegoat opportunity that may well be availed. [EDIT ADD} Nice article highlighting the QE situation: https://www.ft.com/content/e4964f08-f196-11e9-ad1e-4367d8281195 https://www.ft.com/content/e4964f08-f196-11e9-ad1e-4367d8281... Also worth noting that negative interest rates seem to be the new tool that will replace/augment QE. Which may just work, though once again, perpetuating a mindset that borrowing over saving mentality in a way that whole generations will become saving avert. More so if/when negative interest rates take traction.