The economics of exchange rates

Snippa worries about the falling pound. Hmm:

It is true that the very last thing that we need right now, as our economy heads to a likelihood of at least 25% unemployment is another economic shock, but that is exactly what this government is planning to give it.

What is a standard solution to high unemployment? To lower your exchange rate. Home production becomes a better deal relative to imports, this is stimulatory to the economy. Exports become more attractive relative to the domestic production of the consuming countries. This is stimulatory to our economy.

We, if we have high unemployment, want a lower pound. Snippa tells us that a lower pound would be a disaster because high unemployment.

And yes, it’s Snippa who taught economics at a British university, not us.

9 thoughts on “The economics of exchange rates”

  1. Some sycophant of his even manages to work “chlorinated chicken” into his response – an infallible guide to the intellectual level of the writer

  2. ome sycophant of his even manages to work “chlorinated chicken” into his response –

    Must be Violet Elizabeth Newmania. He who manages to shoehorn Brexit into every comment.

  3. Bijou problemette is that everyone is in the same boat and will also be trying to lower their exchange rate so that will be difficult.

  4. Given how out of whack his economics is compared to reality and how short his memory seems to be, I imagine his teaching of economics was the sort where he was just a couple of pages ahead of the class in the text book.

  5. Dennis, On The Front Lines Fightin' Them Chlorinated Chickens

    Some sycophant of his even manages to work “chlorinated chicken” into his response – an infallible guide to the intellectual level of the writer.

    Chlorinated chickens? *Racks slide on CZ-75B* Where?

  6. The Meissen Bison

    What is a standard solution to high unemployment? To lower your exchange rate.

    When did the government last directly set the exchange rate? Indirectly by setting the interest rate, yes, but even that is now within the purlieu (supposedly) of an independent BoE.

    As Roué says, interest rates are in the basement across the board, so there is nowhere for this policy to go. (I remember onite swissy depo being negative when I was a callow calf but that was to fend off hot money looking for a safe billet.

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