Dunno about that explanation, Darren. International trade explained through the MMT lens is still troubling me. Warren Mosler sees exports as a cost. That's how I sorta see them, especially if the exporting country is undersupplied with the stuff exported. He sees imports as a benefit. So do I, especially if those imports directly lead to more production capacity in the importing country.
I also don't quite understand how the purchases are made in different currencies. It's often explained that, while, for example, an Australian business sells stuff to the USA, they are willing to accept $US as a deposit into the US bank account held by that business which can then use that $US to buy stuff in the USA. Is this correct? 🤔
Like a budget deficit, a trade deficit is neither inherently good nor bad. A trade deficit just means you are sending your domestic currency to someone internationally and getting something real in turn.
Wealth concentration via compulsory superannuation and trade imbalances of a government favouring imports over exports to meet domestic demand have potential negative impacts?
Dunno about that explanation, Darren. International trade explained through the MMT lens is still troubling me. Warren Mosler sees exports as a cost. That's how I sorta see them, especially if the exporting country is undersupplied with the stuff exported. He sees imports as a benefit. So do I, especially if those imports directly lead to more production capacity in the importing country.
I also don't quite understand how the purchases are made in different currencies. It's often explained that, while, for example, an Australian business sells stuff to the USA, they are willing to accept $US as a deposit into the US bank account held by that business which can then use that $US to buy stuff in the USA. Is this correct? 🤔
The primary purpose of exports is to obtain the currency for what you wish to import, so yes.
However, the supposed logic behind this is to import the material you do not make or cannot make as an input to the stuff you can make.
M
MMT impacts wealth over income but encourages trade deficits?
Like a budget deficit, a trade deficit is neither inherently good nor bad. A trade deficit just means you are sending your domestic currency to someone internationally and getting something real in turn.
https://darrenquinn.substack.com/p/great-debate-fx-transactions-keen goes in to the details.
Wealth concentration via compulsory superannuation and trade imbalances of a government favouring imports over exports to meet domestic demand have potential negative impacts?
Can you break that down a bit more for me, please? I want to ensure that I am not replying to something you are not saying.