Cafe Hayek - Latest Comments in Sudha Shenoy on the Trade Deficit

Re: Sudha Shenoy on the Trade Deficit

Aaron Krowne — Thu, 12 Oct 2006 06:21:15 -0000

Brad Setser has already dismantled these arguments:

http://www.rgemonitor.com/b...

Give it up, Don. This is getting desperate... like trying to argue that global warming isn't happening. The fundamentals are pretty obvious here.

Re: Sudha Shenoy on the Trade Deficit

triticale — Thu, 12 Oct 2006 01:00:18 -0000

Bad analogy. The convenience of an ATM may encourage reckless cash flow, but it only provides access to liquid funds.

Re: Sudha Shenoy on the Trade Deficit

Alexei McDonald — Thu, 12 Oct 2006 00:23:09 -0000

Surely the rises in oil and other commodity prices would cause industrial imports to rise as a proportion of the whole, even if actual quantities of materials imported remained unchanged? If so, you can imagine a scenario where consumer imports were increasing modestly, but were counterbalanced in the figures by an oil price increase.

Re: Sudha Shenoy on the Trade Deficit

spencer — Wed, 11 Oct 2006 10:05:47 -0000

Supposedly we import and export what we do because that is what we have a comparative in.

It does not have anything to do with whether or not we are over or under consuming or investing.

Re: Sudha Shenoy on the Trade Deficit

Bill Conerly — Wed, 11 Oct 2006 08:11:55 -0000

"Americans have been recklessly borrowing against their assets to buy consumer goods; hence the trade deficit & capital inflow."

Looking at the composition of imports does not refute that statement. We can be importing capital goods simply because we have shifted domestic production to consumer goods.

Refutation of the statement requires a look at how we're spending our money. How about this: Over the past 10 years, real consumer spending has grown at an annual rate of 3.7%; real business fixed investment has grown at 4.9% annual rate; real residential investment at 5.2% rate. We come to the same conclusion.

Re: Sudha Shenoy on the Trade Deficit

Kevin — Tue, 10 Oct 2006 18:55:14 -0000

Good post, but I wish he'd move on past that 1993-ish way of "underlining" words. That's what HTML's for!