Report Detail Summary
Capital Flight, Trade Wars and Exchange Rates
August 19, 2018
Although the President views on trade war as well known. He has said on occasion that trade policy can be used as a negotiating tactics and that trade wars are easy to win. Yet he has never fully articulated what constitutes winning? To us, there are several possibilities. Free traders, as we, would argue that removing all trade restrictions would be good for the world economy. Such an outcome would make everyone better off and, in this case, everyone wins. Under this scenario, the only issue that needs to be determined is who win the most. Once winning is defined, there is a remaining task. How to measure winning. For that, we have a couple of indicators: The exchange rate and the national stock market measured in a common currency, say the US dollar. The behavior of the exchange rates and the local stock markets in US dollar in the aftermath of the announcement of the steel tariffs this spring. The dollar surged uniformly across the selected regions and countries while the US market outperformed most of its peers. Hence by these indicators, the US is wining the trade war. You must have an active account to view these reports. You may register for a trial here ![]() ![]() Copyright © 2018 La Jolla Economics All Rights Reserved Legal Disclaimer - Privacy Policy - Contact Information - Login |
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