If we vote for Brexit what happens

Moby

Gordon Brown has just given what is generally regarded as the best pro- Europe speech. Taken from The Guardian:-
Gordon Brown's speech - Summary

Gordon Brown’s speech may have been somewhat overshadowed by Boris Johnson’s pasty-waving antics on Cornwall today, but that’s a shame because it is one of the best pro-EU speeches anyone has yet delivered. At his best he can produce oratory that is a class apart from anything you hear from David Cameron, or anyone else in frontline politics today, and we heard some glimpses this morning. Sky’s Faisal Islam says it is the best pro-EU speech he’s heard.
— Faisal Islam (@faisalislam) May 11, 2016 Most impressive pro-EU speech I've heard in campaign so far from Gordon Brown - no project fear, reminds me of his pre-indyref peroration

CLAPTON

Filo25 wrote: »

Not sure if I'm missing something here, but cells post is pretty much what I have read before in many macroeconomics books, not in many accountancy ones though (given I am for my sins an accountant who did an Economics degree)

explain why the UK can't run a surplus in trade goods.

The UK does not need to nor can it run a surplus in trade of goods becuase we have a surplus in services and a surplus in capital inflows (eg students spending £50k a year to study and love in London)

Filo25

To be honest I would prefer to say that we can't run a surplus in tradeable goods because we aren't amazingly good at making many (not all!) of them

Ultimately though in the long run you can't really run a surplus on your balance of payments, have capital inflows and also run a surplus on tradeable goods.

Realistically though if you improve your tradeable position you can always reduce net capital inflows by increasing investment overseas.

CLAPTON

Filo25 wrote: »

To be honest I would prefer to say that we can't run a surplus in tradeable goods because we aren't amazingly good at making many (not all!) of them

Ultimately though in the long run you can't really run a surplus on your balance of payments, have capital inflows and also run a surplus on tradeable goods.

We do, in fact run a deficit in the current account which is balanced, by definition, exactly by the surplus in the capital account.

However we could run a surplus in the current account and then the capital would adjust to balance.

Causality is that the current a/c balance determines the capital a/c and not vice versa

Realistically though if you improve your tradeable position you can always reduce net capital inflows by increasing investment overseas.

As a arithmetic statement this may be so; however there is no causal link between (say) RR selling a huge extra number of engines to the USA and Standard life choosing to invest more money over seas.

Filo25

CLAPTON wrote: »

We do, in fact run a deficit in the current account which is balanced, by definition, exactly by the surplus in the capital account.

However we could run a surplus in the current account and then the capital would adjust to balance.

Causality is that the current a/c balance determines the capital a/c and not vice versa



As a arithmetic statement this may be so; however there is no causal link between (say) RR selling a huge extra number of engines to the USA and Standard life choosing to invest more money over seas.

No indeed there isn't, if you look historically at the 80's when North Sea Oil was improving the tradeable sector significantly, the combination of that and high interest rates leading to capital inflows led to a rapid appreciation in Sterling which damaged other parts of the tradable economy seriously, the economy usually finds some way to get back into equilibrium, its not always the one you would ideally choose.

CLAPTON

Filo25 wrote: »

No indeed there isn't, if you look historically at the 80's when North Sea Oil was improving the tradeable sector significantly, the combination of that and high interest rates leading to capital inflows led to a rapid appreciation in Sterling which damaged other parts of the tradable economy seriously, the economy usually finds some way to get back into equilibrium, its not always the one you would ideally choose.

no, the economy didn't get back into 'equilibrium' unless you call over 3 million unemployed as 'equilibrium'. The balance of payments balanced as it always does.

Filo25

It was equilibrium given the rather bizarre policy choices the government made at the time, fortunately the fad of monetarism as the guiding light of economic policy was shortlived.

There's nothing to say economic equilibrium had to be pleasant or the ideal outcome.

CLAPTON

Filo25 wrote: »

It was equilibrium given the rather bizarre policy choices the government made at the time, fortunately the fad of monetarism as the guiding light of economic policy was shortlived.

There's nothing to say economic equilibrium had to be pleasant or the ideal outcome.

no idea what you consider economic equilibrium

Filo25

CLAPTON wrote: »

no idea what you consider economic equilibrium

Equilibirum was reached in the Labour market at the time, largely because the long term unemployed weren't putting any downward pressure on wages as they were no longer viewed by many employers as being active in the Labour market, they weren't therefore a threat to those in work who could continue to push for pay increases in spite of large headline unemployment.

So you could continue to have high unemployment and wage inflation, at that time, it led to the subsequent policy government initiatives to try to make it easier for the Long term unemployed to get back in the workforce and become economically active.

Anyway we're getting a long way off topic now.

Shakethedisease

The proverbial is probably going to hit the fan tomorrow, if this report doesn't square the official numbers with NI numbers in an easily understandable to the masses kind of way.

The study is intended to explain why an 1.3million more National Insurance numbers have been given out to EU citizens than are accounted for in official statistics. Experts predict the number of incomers could be 50,000 more than are recorded every year.

Mr Johnson, speaking at the launch of the Leave campaign’s road campaign, said there had been a huge rise in immigration ‘without consent’ from the public.

He said politicians had been driven to ‘dishonesty’ because they did not want to admit they cannot control immigration while Britain is inside the EU.

http://www.dailymail.co.uk/news/article-3585680/Ministers-trying-bury-bombshell-migration-report-Boris-Johnson-blasts-dishonest-politicians-misled-public-true-number-EU-immigrants-come-Britain.html

This immigation without 'consent' line am afraid to say, will have some serious traction imo.