tag:blogger.com,1999:blog-8764541874043694159.post3341707795476246665..comments2024-03-28T12:23:39.665+00:00Comments on Coppola Comment: Tariffs, trade and money illusionFrances Coppolahttp://www.blogger.com/profile/09399390283774592713noreply@blogger.comBlogger8125tag:blogger.com,1999:blog-8764541874043694159.post-91743594154161867052017-09-02T09:21:05.692+01:002017-09-02T09:21:05.692+01:00There is at least one fallacy in this article. As ...There is at least one fallacy in this article. As far as consumers and producers are concerned, tariffs have the same effect as transport costs. They push up prices of imported products, imported raw materials and imported components. This gives rise to inefficiencies as access to the best-value source is artificially restricted in favour of the locally produced item. "Anti-dumping" tariffs are particularly damaging as producers are deprived of access to low cost inputs, which makes them less competitive. They are then fighting for market share against producers in other countries which allow the dumped items to be imported.<br /><br />It seems to be not appreciated that the main losers from dumping are the dumpers who have wasted resources in producing something and selling at below the cost of production. <br /><br />Exchange rates are influenced by other factors than exports and imports. Sterling is supported by the attraction of low-tax real estate.Physiocrathttps://www.blogger.com/profile/13682019625346594568noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-35283473334990208432017-09-02T07:36:27.373+01:002017-09-02T07:36:27.373+01:00Thanks Frances for this piece. I wish this type of...Thanks Frances for this piece. I wish this type of rebuttal could be more widely published. The devastating thing is, we have triggered A50, cut the hawsers and are sailing into the Atlantic with our S/S Global Britain - I don't get the feeling it is reversible. I am extremely concerned about the UK's economic future.Winstonnoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-91227600222548475372017-08-23T09:23:37.423+01:002017-08-23T09:23:37.423+01:00As an aside, the UK government currently raises ap...As an aside, the UK government currently raises approximately £3bn per annum from customs duties, which would be lost under Minford's UFT proposal. His proposal, by itself, would thus increase the annual fiscal deficit by this amount.PaintingWithNumbershttps://www.blogger.com/profile/04626024525506054863noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-53081387819326009742017-08-23T02:44:02.314+01:002017-08-23T02:44:02.314+01:00Dismal propaganda dressed up as academic argument....Dismal propaganda dressed up as academic argument. This is all we seem to get these days from the right especially over their pet obsessions like Brexit. The media lap it up.Keithhttps://www.blogger.com/profile/00769952853595228563noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-81337915713171257222017-08-23T00:07:46.084+01:002017-08-23T00:07:46.084+01:00And there is a second error in my first piece:
Gi...And there is a second error in my first piece:<br /><br />Given import elasticity, then the value of imports denominated in foreign currency would rise if import tarrifs were removed. So as Frances says, this by itself would cause sterling to depreciate, not appreciate as I incorrectly first said, once import tarrifs are removed.<br /><br />I believe my mistakes are similar to Minford's, ie I failed to separate fiscal effects from GDP effects. <br /><br />I shall hang my head in shame<br /><br />PaintingWithNumbershttps://www.blogger.com/profile/04626024525506054863noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-27227375006746413242017-08-22T23:25:10.148+01:002017-08-22T23:25:10.148+01:00Actually, on reflection, I am as probably as mista...Actually, on reflection, I am as probably as mistaken as Minford et al.<br /><br />Changing the value of imports does not change the value of GDP (double entry bookkeeping) . So the impact of eliminating import tarrifs will simply reduce government revenue and, by itself, have no impact on GDP.<br /><br />I hope I'm correct to say thisPaintingWithNumbershttps://www.blogger.com/profile/04626024525506054863noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-80403155492351849672017-08-22T22:52:51.603+01:002017-08-22T22:52:51.603+01:00Its very strange that a country that is being forc...Its very strange that a country that is being forced to sell its own assets to pay for a massive trade deficit is seeking to devalue its assets in order to reclaim control over its assets. I suppose believing that markets buy dear and sell cheap would give every optimist a Brexit wet dream.21st Century Peasanthttps://www.blogger.com/profile/04406069742196382442noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-65024694279700388782017-08-22T22:23:26.415+01:002017-08-22T22:23:26.415+01:00It's hard to know whether Minford's propos...It's hard to know whether Minford's proposals would raise GDP and make we plucky Britons richer unless the UK's export performance under Unilateral Free Trade (UFT), as Minford's proposal has become known, is considered. On the face of it, UK export performance would be damaged by UFT because of tarrifs, or other barriers, imposed by the EU and the Rest of the World on UK exports. <br /><br />As for the effect of dropping all import tarrifs the addition to GDP claimed by Minford, so far as I can determine, would depend on the elasticity of UK imports.<br /><br />If the elasticity of imports is zero then the volume of imports will not change if import tarrifs are dropped. If so, then the entire benefit of the tarrif reductions will be captured in GDP such that the increase in GDP will be equal to the reduction in the nation's import bill. The reduced demand for foreign currency required to meet this new shiny import bill should by itself raise sterling's value. If so, this would logically be deleterious to UK exports, which would presumably face EU and ROW tarrifs in any case. Not good.<br /><br />If the elasticity of imports is unity then there will be a small reduction in the nation's import bill leading to an equivalent small gain to GDP. Presumably a small upward pressure exerted on sterling's value will result. Consumers will presumab;y binge on the cheaper imports.<br /><br />I suspect in reality import elasticity lies somewhere between zero and unity. I also suspect that any consumption binge arising from UFT will be short lived, although much depends on how the UK's post Brexit performance develops. Minford et al do not seem to have squarely addressed the issue of Britain's export performance post Brexit. <br /><br />Pig in a poke, anyone?PaintingWithNumbershttps://www.blogger.com/profile/04626024525506054863noreply@blogger.com