The second one ： revive the export economy
In the economy down turn.the prospects for Britain is to have more injection for the economy~ So what including in injection ? EXPORT ,INVESTMENT and GOVERNMENT SPENDING! So if there are more injection in the economy which is also means there are more money is coming into our economy.Which is a good thing to have .Therefore the idea of Krugman is let Britain to go back to produce manufactured goods and to sale more export to other countries to boost the economy in Britain. Yes this is a good idea actually say if Britain start to do the manufactured good is snot only can help to get more income and more GDP but also will reduce the import from other countries .That's can save a lot of money~
But the problem is,Is Britain really good at producing manufactured goods? For example China must be much cheaper to produce that kind of things because the low labour cost .But not in Britain.And if they start to produce the good now a lots of new firms need to be started up.And of course the government have to give subsidies to the factories .Although it is a injection but it still need to be consider very carefully by the government.And there will be many opportunity cost of doing this .And then continuing saying of the product to be produced in Britain.The price will be expensive to export I suppose ! As I said because the labour land and resource cost is maybe much high .
So what am I trying to say is if Britain start to produce the manufacture things it certainly could reduce the amount of the import but is not means that the export will increase as well.
Diseconomies of scale
7 years ago
6 comments:
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So,I agree and also I disagree with this article. First of full, I agree with including more injection in Britain economy, because their government have some problems with producing manufactured goods and export, but I think that it's not very hard for Britain to go back to produce manufactured goods,of course it will be very expensive to export British goods,not like Chinese which can be cheaper, but I think that quality of British goods will be much better than Chinese.Of course the amount of the import can reduce because it's more expensive to buy British goods than Chinese, anyway people will use British manufactured goods although their price.
But how can you know that people will use British manufactured goods ? yes the quality is probable high but the price will be high as well And when the economy situation is not so good more people will consider about the cheaper goods which from china export maybe . So if like that the British manufactured goods nobody will buys them.That is the diffculty I suppose~
So,i will start my first comment...simply,in a few words i will try to explain thing,what i am thinking about..i will write about an export from Britain to all over the world..for example i will speak about "products of industry",such as cars..i am saying that products of an export must have a very high quality. for example english cars are high quality product,but Russians do not buy them mostly,because that cars are unreliable,i mean that they often break down,because russian climate is hard,the roads mostly just dreadful. so i want to say: yes,english cars comfortable,good looking,high quality,but because of that they are unreliable,in russia sells of that product is quite small. but if that cars would be more reliable, Britain would have more export of cars to russia,so more money to the U.K., and better for economical situation in Egland..i mean Britain should think not only about amount of an export to other countries,but also take in consider the things such as quality,reliable and a cost of all goods Britain exports...
i think to solve this problem we should use 80 100 law. I dont know much about this law... but i think i know something... So, if the product will be produced with the 80% quality there would be more exports. But, if the product will be prodiced with 100% qualit the demand for that supply would be less(( it means most of the people would not buy it. But this law states that the product wich is produced with the quality 80%, is still really good. The demand for that product is inelastic because it will be cheap. And i think this may help to solve the solution)
Saying "Britain should start the manufacturing again" is just ridiculous because this country can do NOTHING. Well it is quite good in exporting services,maybe that is one of the ways to stimulate exports,but manufacturing is dead. All the firms that will start here will go bust because of the cheaper goods from China or South America or Eastern Europe or whatever you like. Government may choose to subsidise these firms but other countries surely have absolute advantage in manufacturing so it will be just a great WASTE of money and time
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