Growth Elephants and Hot Currencies

Those who want a break from all the introspection over terrorism could do worse than let their minds run free on the implications of what is happening in China and India, or puzzle about holiday destinations now that the euro is going down while some other destinations are evidently seeing the value of their money rise.

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About Edward Hugh

Edward 'the bonobo is a Catalan economist of British extraction. After being born, brought-up and educated in the United Kingdom, Edward subsequently settled in Barcelona where he has now lived for over 15 years. As a consequence Edward considers himself to be "Catalan by adoption". He has also to some extent been "adopted by Catalonia", since throughout the current economic crisis he has been a constant voice on TV, radio and in the press arguing in favor of the need for some kind of internal devaluation if Spain wants to stay inside the Euro. By inclination he is a macro economist, but his obsession with trying to understand the economic impact of demographic changes has often taken him far from home, off and away from the more tranquil and placid pastures of the dismal science, into the bracken and thicket of demography, anthropology, biology, sociology and systems theory. All of which has lead him to ask himself whether Thomas Wolfe was not in fact right when he asserted that the fact of the matter is "you can never go home again".

8 thoughts on “Growth Elephants and Hot Currencies

  1. I do not have the like but i read last year a meaningful article about how India-china are building a Union without the politicians but by Business (in a comparaison with Europe) :

    More a more products were designed in India build in China, shipped from HK ( but the ways can be differents). The Links between these giants seam more and more strong, they are opening their hugely growing internal market to eachother. It s a pleasure to see the half of humanity going a peaceful and optimistic way. I am happy to live on this side of the planet (Australia 😉 ).

  2. “how India-china are building a Union without the politicians but by Business”

    I have the impression that Singapore is a pretty important hub in all this. The main Indian IT outfits seem (eg) to have all their back-up servers in Spore.

  3. This news is also not without interest, and all with virtually no advertising.

    “The 100,000th Logan rolled off the assembly line at Pitesti, Romania, the first production site, this month, and Renault said it was exceeding its most optimistic sales targets both in Romania and abroad. World sales in the first six months of this year exceeded 79,000, the company said.

  4. yes

    Sg is important but a small player in front of these giants (and i put Sg in the chinese’s area, mandarin rule ;-)).

    Renaut made a good move, but i am really worry for the european economy when chinese’s cars will reach our continent, with the help of the bigger player (BMW, toyota, honda), their ambition it to produce as the same or better quality than japanese !! and they become really good at reaching their target.

    the cars industries has so much ramification in our economy that this move can be a real economic Tsunami for us (europe)

    what is your opinion/ information about that ?

  5. “the cars industries has so much ramification in our economy that this move can be a real economic Tsunami for us (europe)”

    I have recently posted something on this:

    I think the Tsunami isn’t coming, in some ways it is already here. If you look at the balance of payments situation, a big chunk of Southern Europe is under-water already. Ideally these societies would now make structural reforms to try and confront the issue, but this is just where you hit the ‘ageing trap’ so it isn’t obvious they will be able to rise to the challenge.

    I was especially taken by this report on the Logan since it seems to confirm a thought I have been having. Essentially if you look at Japan, as the crisis dragged on, so the quantity of cheap imports from China rose and rose. There was a kind of ‘negative elasticity’, ‘inferior good’, effect. Now a lot of people are putting a lot of hope on a future Renminbi re-valuation, but if this Logan ‘no advertising’ downtrade tendency spreads, then we could see the movement into lesser known brands offsetting any currency effects.

    In general what I am trying to draw attention to is the kind of acceleration effect which is characterising events, and the way in which we face not one, but a packet of problems. My main hunch is that the only serious way to address things will be via a (yet to be worked out and applied) variant of complexity theory.

  6. i glad to see you (an economist) worry a bit about this string of new events and situation , usually when i post on this kind of subject i get a “comparative advantage, stupid” answers.
    But i am not really in Ricardo theory because of the new globalization, technologies and investments do not have any frontiers anymore, look like a bit like frontiers are cancelled (but i m not economist, i just got courses macro/micro (postg)).

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