Too bad it’s based on wrong assumptions. It’s not the arithmetic that’s the issue, it’s the model.
some economics undergrad could come up with the same thing
And if they did it on a test, they’d flunk it.
Understanding the underlying methodology shows how it completely lacks nuance or understanding of how the world really works.
Yeah, it fails to understand the rationale for comparative advantage (there’s a reason Ecuador exports more bananas than Norway does), and it also fails to consider the balance-of-payments effect of things like foreign direct investment (which looks zero-sum when it first takes place but means the profits are outflows from that point on, unless the foreign investors choose to reinvest them).
Also I don’t think the idiots who came up with that table know the difference between a current account balance and balance of trade.
Too bad it’s based on wrong assumptions. It’s not the arithmetic that’s the issue, it’s the model.
And if they did it on a test, they’d flunk it.
Yeah, it fails to understand the rationale for comparative advantage (there’s a reason Ecuador exports more bananas than Norway does), and it also fails to consider the balance-of-payments effect of things like foreign direct investment (which looks zero-sum when it first takes place but means the profits are outflows from that point on, unless the foreign investors choose to reinvest them).
Also I don’t think the idiots who came up with that table know the difference between a current account balance and balance of trade.