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The other people in the fixed exchange rate area that don’t receive the transfer. So the Greeks etc. The same people that the Germans have been exporting their

The other people in the fixed exchange rate area that don’t receive the transfer. So the Greeks etc. The same people that the Germans have been exporting their unemployment to for twenty years

Propelloni 2y ago
That's a hot take. Care to elaborate?
- tmcb 2y ago
  I am not sure if I agree with his conclusion, but some economists are of the opinion that countries in Northern Europe used the euro as a political tool to protect their own internal markets by making goods produced in the poorer countries of the Eurozone less competitive. If a country’s government could previously deflate their own currency to make their exports more attractive, they cannot do it anymore since they joined the Eurozone.
  - Propelloni 2y ago
    OK, I've heard of the second part about being unable to devalue the Euro because it basically reflects the economic power of the Eurozone as a whole and that e.g. Greece leaving the Eurozone could have helped Greece in 2008. But as a whole I'd guess that especially export-focused Eurozone members like Germany would welcome a depreciation of the Euro. At the very least I think they would not try to bolster it. It does, however, not bring me any closer to understanding the "exporting unemployment" statement. I guess it is some kind of multi-step reasoning that is eluding me, or maybe it is an example of a control illusion? I don't know.
    - tmcb 2y ago
      > But as a whole I'd guess that especially export-focused Eurozone members like Germany would welcome a depreciation of the Euro. Yes, but only if it is guaranteed that their imports would depreciate similarly. Otherwise, say, Germany would devalue the Deutsche Mark but then run into the risk of importing produce from The Netherlands at a higher cost. > It does, however, not bring me any closer to understanding the "exporting unemployment" statement. The monetary policy after the 2008 crisis forced poor countries to cut public spending so that industrial economies could be bailed out. As a metaphor, the potentially unemployed factory worker from Germany was replaced an actual unemployed public service worker in Greece.
- neilwilson 2y ago
  It’s like a state pension. Does anybody think paying the state pension increases the standard of living of those who don’t receive it? If it does why is there so much moaning about the dependency ratio?
  - Propelloni 2y ago
    My bad, I could have been clearer. I meant the part with "exporting unemployment".
jstanley 2y ago
How do you export unemployment?
- neilwilson 2y ago
  By selling stuff to Greeks and then not spending the money back with Greece. Same as the Chinese have done with the USA - except with a fixed exchange rate. You get the same within a country when the counteracting transfers are insufficient. London booms and Birmingham declines.

The other people in the fixed exchange rate area that don’t receive the transfer. So the Greeks etc. The same people that the Germans have been exporting their unemployment to for twenty years

Propelloni 2y ago

That's a hot take. Care to elaborate?

tmcb 2y ago
I am not sure if I agree with his conclusion, but some economists are of the opinion that countries in Northern Europe used the euro as a political tool to protect their own internal markets by making goods produced in the poorer countries of the Eurozone less competitive. If a country’s government could previously deflate their own currency to make their exports more attractive, they cannot do it anymore since they joined the Eurozone.
- Propelloni 2y ago
  OK, I've heard of the second part about being unable to devalue the Euro because it basically reflects the economic power of the Eurozone as a whole and that e.g. Greece leaving the Eurozone could have helped Greece in 2008. But as a whole I'd guess that especially export-focused Eurozone members like Germany would welcome a depreciation of the Euro. At the very least I think they would not try to bolster it. It does, however, not bring me any closer to understanding the "exporting unemployment" statement. I guess it is some kind of multi-step reasoning that is eluding me, or maybe it is an example of a control illusion? I don't know.
  - tmcb 2y ago
    > But as a whole I'd guess that especially export-focused Eurozone members like Germany would welcome a depreciation of the Euro. Yes, but only if it is guaranteed that their imports would depreciate similarly. Otherwise, say, Germany would devalue the Deutsche Mark but then run into the risk of importing produce from The Netherlands at a higher cost. > It does, however, not bring me any closer to understanding the "exporting unemployment" statement. The monetary policy after the 2008 crisis forced poor countries to cut public spending so that industrial economies could be bailed out. As a metaphor, the potentially unemployed factory worker from Germany was replaced an actual unemployed public service worker in Greece.
neilwilson 2y ago
It’s like a state pension. Does anybody think paying the state pension increases the standard of living of those who don’t receive it? If it does why is there so much moaning about the dependency ratio?
- Propelloni 2y ago
  My bad, I could have been clearer. I meant the part with "exporting unemployment".

jstanley 2y ago

How do you export unemployment?

neilwilson 2y ago
By selling stuff to Greeks and then not spending the money back with Greece. Same as the Chinese have done with the USA - except with a fixed exchange rate. You get the same within a country when the counteracting transfers are insufficient. London booms and Birmingham declines.