Foreign Policy Rant Edition (Heather Hurlburt & Daniel Drezner)

[dieter]

Originally Posted by apple

Appreciation does not boost real incomes, only nominal incomes, unless you're importing all your stuff.

It did in Germany in the past, because it allowed Germans to import more in return for their exports, or spend money abroad.

Originally Posted by apple

But if I understand you correctly, you're arguing that if it were not for the euro, Germany would be having 12% GDP growth a year?

No, I am not talking about GDP growth, although growth was depressed as well. Germany had the lowest investment rate in Europe during the 2000s, because German savings were invested abroad. This effect has reversed since the onset of the Euro crisis.

I am arguing that Germans would have been able to consume 10% more each year on average than they actually did. That doesn't directly translate into GDP either. Germans travel a lot and that would have added to the GDP of other nations.