trade

We have reached end-of-paradigm – the final failure of microeconomics masquerading as macro. The solution, the new macro paradigm, requires monetary literacy and numeracy. And this can only be achieved by removing the conceptual blinders by…

Germany had a relatively small trade surplus in the early 1990s. But after the euro was formed, the surplus vaulted higher. The clear implication is that Germany's export sector benefitted hugely from the introduction of the euro.

By Michael Pettis About ten years ago I published an article in Foreign Policy that I just recently re-read.  In the article I extended one of the arguments I made in my book, The Volatility Machine, that the globalization process is…

When I listed my Ten Surprises for 2012 in January I predicted that China would have a hard landing, defined as quarterly growth below 5% annualised by the end of this year. But I also said that India would be worse than China. And it is…

Yesterday I wrote about Chinese trade growth plummeting. This is having a negative impact on economic growth. The Chinese authorities get that. And so they have decided to boost demand.

In recent months, we have seen a precipitous drop in Chinese trade growth. This comes from both the export and the import side. What's happening? A large part of it is wages. As I indicated two years ago in a post on the Lewis Turning…

As predicted earlier this year, Japan continues to struggle with its energy needs. The chart below shows the recent trend in Japan's imports of residual fuel oil. These fuel imports are quickly translating into a rising trade deficit.

A look at the fundamentals shows why Fernandez is engaging in such visible theatrics, which also includes recent vitriol regarding the Falkland Islands. Simply put, we think economic stresses are intensifying. How deep the stresses will get…

Exports are still falling on a year-over-year basis, but at a slower pace. Imports are still rising, but here too the pace is slowing. The swing into trade deficit for Japan happened from both sides. Exports were squeezed by the…

In this issue of the newsletter I want to sketch out a scenario in which rather than analyze policy announcements or make predictions I try to lay out what are the various possible paths open to China. The scenario concerns trade. China’s…