Beijing continues to peg the value of its currency to the dollar, despite an immense accumulation of foreign reserves and a persistent surplus in China's account equal to about 10.5 percent of its annual economic output, a surplus that in standard monetary theory would prompt China to allow its currency to rise.
The result was a persistent surplus and no more orders for VLCCs for a decade.
Even something like a 30% appreciation in the RMB wouldn't eliminate their effects.Meanwhile, the list of liquidity-trap afflicted countries harmed by China's persistent trade surpluses includes a number of persistent surplus countries.
Yet a large and persistent surplus in the trade balance (or the current-account balance, which includes foreign income) can be the symptom of a distorted economy.
Such macroeconomic developments are not applicable to the equally persistent surplus in U.S. net exports of services unless the income elasticities for services exhibit the reversed asymmetry.
This transfer was financed because, throughout the colonial period, India had a persistent trade surplus with Britain, and thus exported capital.
The surplus countries China, Germany, Japan, Russia have a comparative advantage in manufacturing and resource industries and report persistent surpluses; the deficit countries noticeably the United States, the United Kingdom and Australia have a comparative advantage in finance but trade deficits.
Net exports worth a further 0.5% of GDP are typically chalked up by related services, such as law, accountancy and consulting.The message from these persistent surpluses is that the City, for all its faults, is a source of comparative advantage.
And an economy with its own currency and a persistent current-account surplus can flout every last bit of conventional debt wisdom and still avoid crisis.
A persistent theme of "Drama" is deception.
