Tuesday, 11 October 2016

Paul Krugman on the Pound (and how Brexit voters mightn't be so dumb after all)

Krugman knows his apples (or is it onions) on trade - it's what he got his Nobel Prize for after all. So this little comment on Brexit and the Pound is interesting:
Pre-Brexit, Britain was obviously experiencing a version of the so-called Dutch disease. In its traditional form, this referred to the way natural resource exports crowd out manufacturing by keeping the currency strong. In the UK case, the City’s financial exports play the same role. So their weakening helps British manufacturing – and, maybe, the incomes of people who live far from the City and still depend directly or indirectly on manufacturing for their incomes. It’s not completely incidental that these were the parts of England (not Scotland!) that voted for Brexit.
Rather questions the automatic presumption that people in Barnsley and Boston voting for Brexit were voting against their interests.


1 comment:

Anonymous said...

That, is a really interesting point.