A challenging question that baffles simple answers.
Neither deficits nor surpluses are necessarily a good thing to whichever country.
First and foremost an assessment of a particular country's stage of development and needs across the economy should be made. Then we know that country's social, economic and productive set-up.
Finally, self-evidence shows that Germany and Japan grew incredibly rich on massive export drives over several decades. The same applies to South Korea, Canada, Singapore or to emerging China as we write. Or Italy and France and many more. France has now been in the red for a while.
It can afford to as long as it doesn't become structural. Or leads to massive losses of industrial production with far-reaching implications.
A stretched timeline is called for to gauge each country and overall economic performance.
It can afford to as long as it doesn't become structural. Or leads to massive losses of industrial production with far-reaching implications.
A stretched timeline is called for to gauge each country and overall economic performance.
Imports are certainly not bad especially if they produce greater dynamism in an economy: raising the quality of products, pushing manufacturing prices down, increasing positive competition across the board.
Excessive imports over long periods generating large-scale deficits (in goods is bad enough, goods and services much worse) are certainly a symptom of other ills in any given economy. Besides, a point in time is reached when it becomes ever harder to finance them. An economy becomes unable to create wealth, the country persistently consumes over and above its production capacity. A society that is plagued by low-paying, low-skilled jobs with an oversized State. Perhaps a small high-paying private sector prospers becoming the envy of the rest.
Excessive imports over long periods generating large-scale deficits (in goods is bad enough, goods and services much worse) are certainly a symptom of other ills in any given economy. Besides, a point in time is reached when it becomes ever harder to finance them. An economy becomes unable to create wealth, the country persistently consumes over and above its production capacity. A society that is plagued by low-paying, low-skilled jobs with an oversized State. Perhaps a small high-paying private sector prospers becoming the envy of the rest.
A measure of balance are the keywords that deserve repetition and action.
In short, over a 10-year period, an economy may do well by counting up 5 deficits and as many surpluses.
Sem comentários:
Enviar um comentário