OK, so, in a leader:
Even so, for a country to follow a strategy of export-led recovery requires others to consume.
Well, whether I agree or not take their point, that not everyone can export their way out of recession (I don\’t take this point as trade is not simply swapping stuff: there\’s added value to the swap so yes, more trade could work or all).
Now look at what they use as an example of why this might not work.
Badly, by first sight. Take a look at the car-scrappage scheme brought in by Alistair Darling just over a year ago. A £2,000 bung to those who traded in their old cars for new, this was meant to be a boost to the UK car industry. Yet two notable winners were Hyundai and Kia – neither major manufacturers in the UK. As a small, open economy, British schemes to boost consumer demand are always going to help domestic retailers as well as foreign manufacturers.
That boosting domestic demand fails shows that export led recovery won\’t work?
Surely it should be reducing domestic demand so that there is more production available for export which would be the proof (or disproof)?