Competitiveness

A useful blog entry for teachers and students of Economics and Business & Management

The concluding paragraph reads:
“It is true that the growth rate of an economy will depend on the growth rate of exports, but the problem is the growth rate of exports depends upon world demand and how competitive those exports are in the international marketplace. We doubt an internal devaluation is the answer to Europe’s problems. To say that a reduction in ULCs will result in a rebound in growth numbers is wrong. You have to be producing stuff that people want to buy. Or you need your currency to devalue by enough to make your goods relatively cheap. This isn’t going to happen in Europe, where the euro has been remarkably strong given the sovereign crisis. The growth answer lies in getting credit flowing through the economy again, and central banks recognise that. It is important to realise that sometimes the obvious solution – like “we need to be more competitive” – is not always the right solution.”
Find the whole entry here: http://www.bondvigilantes.com/ where you can also sign up for regular email updates. The articles are intended for investment professionals but there are useful titbits for Economics and Business teachers and students.

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China - Inflationary Pressures and the Exchange Rate [16 Feb 2010]
Tutor2u in Hong Kong [30 Oct 2009]
IB Higher Economics - Improving your Exam Skills [30 Oct 2009]
Paul Mason on the Wall Street Crash [28 Oct 2009]
Lessons from an Ad Man - Superb Microeconomics [25 Oct 2009]
Surge in Chinese growth as domestic demand takes priority [24 Oct 2009]
Paul Romer on economic growth [24 Oct 2009]
Sugar prices and the terms of trade for exporters [23 Oct 2009]
Brazil taxes hot money to control her currency [22 Oct 2009]
Unreported World [14 Apr 2009]

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