We Can Not Make A Trade War Any More

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Joseph-Stiglitz, economic professor of Colunbian University

, 2001 Winner of the Nobel Prze for economy USA continues entanglement in Chinese exchange rate issues. When the Great Depression begins, many people worried about protectionism rear its ugly head. Indeed, the Group of 20 (G20) leaders promised, they have absorbed lessons from the Great Depression. However, the Group of 20 in 17 countries held in December 2008 the first few months after the summit adopted a protectionist measures. Stimulus bill in the U.S. "Buy American" provisions in the most attention. However, protectionism has been restrained; the World Trade Organization has played a certain role. Developed economies, the economic downturn have triggered a new round of state of the danger of protectionism. For example, in the United States, six workers, at least one can not find full-time job. These risks are less than U.S. stimulus related to the stimulus both to economic recovery, but also focus on the An Fuguo Council. With the soaring deficit, the second round of stimulus seems unlikely, and with monetary policy to limit inflation hawks continued popularity, Congress is almost impossible to help. Thus, protectionism is on the rise. U.S. Congress authorizes the Treasury assessment of whether China is a "currency manipulator." Although the president asked Treasury Secretary Timothy Geithner ? delayed the release of the report several months, but this "currency manipulator" concept itself is flawed. All governments have taken will directly or indirectly affect the exchange rate action. Uncontrolled fiscal deficits will lead to a weak currency, low interest rates will be, too. Greece in the recent crisis, the U.S. benefited from the low dollar / euro exchange rate. So Europeans should be accused by the U.S. of "manipulating" exchange rate, increase exports, to the detriment of their interests? While politicians focus on the U.S. bilateral trade deficit with China - has been a great deficits - it is really important multilateral balance. Under Bush, the outside world began to demand that China revalue its currency, China's multilateral trade surplus was very small. But in recent years, China has a large multilateral trade surplus. Similarly, Saudi Arabia also has bilateral and multilateral trade surplus: the U.S. wants its oil, while Saudi Arabia wants American people less. Even if the absolute value of the point of view, the multilateral trade surplus in 2008 amounted to Saudi Arabia 2 120 billion, making China 1 750 billion dollars in favorable balance shame. from the (GDP) ratio point of view Gross national product, Saudi Arabia's current account surplus of 11.5% of GDP, more than double of China. But for U.S. arms exports to Saudi Arabia, Saudi Arabia's trade surplus is much more than this figure. Insufficient aggregate demand in a global economy, the current account surplus is a problem. But in fact, less than China's current account surplus of Japan and Germany, the number of superposition; from the ratio of point of view, China current account surplus accounted for 5% of GDP, while in Germany the proportion was 5.2%. In addition to the exchange rate outside of a country's global trade balance, there are many factors. A key determinant of national is saving. If the Americans do not significantly increase savings, then the U.S. trade deficit will not significantly reduce the multilateral; despite the Great Depression to an increase in household savings (before that, the personal saving rate close to zero), but it is easily offset by expansion of the government deficit . Exchange rate adjustment may simply change the United States to buy textiles and apparel locations - from China move to Bangladesh or Sri Lanka (China electronics). At the same time, increase the exchange rate may increase China's wealth gap, because the poor farmers will face heavily subsidized U.S. farmers from the fierce competition. This is a truly global economy, the trade-distorting - in this trade distortion, because the United States helps some of the world's richest farmers, resulting millions of poor people affected in several developing countries. From: wholesale electronics

by: www.goodscool.com

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