Quote:
Originally Posted by willx
Hm, well, I'm not sure how to address the FX comment without going into the extensive literature of macro-economic effects of currency reserve imbalances and the supply and demand of currencies related to underlying interest rates.. What I suppose we can simply agree upon is that in the short-term exchange rates can have a massive effect on an economy?
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Agreed.
Quote:
Originally Posted by willx
I was just having a conversation with someone about this recently in relation to "trade-hubs" like Singapore and tying it back to jobs like mine in "Professional Services" -- this is my speculation, but much of Singapore's balance of trade showing up as positive is "value-added" goods and services that I believe are consumed domestically. Primarily services. This shows up as an ongoing positive balance of trade.
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The basic information you need to answer your speculations is available from
Statistics Singapore.
Quote:
Originally Posted by willx
What I think is happening is value capture through the facilitation of the international trade between the two counter-parties with the export component actually being "domestic" GDP production via services.
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This chart is particularly relevant:
balance of payments (2008 to 2012). Interestingly, Singapore's balance of services was S$2.3 billion (US$1.9 billion) in 2011, compared to a goods balance of S$84.8 billion (S$69.5 billion). On paper, that means we're importing almost as much services as we're exporting. I didn't expect that but, on reflection, it's not surprising. It simply means that, as a small economy with a narrow resource/capital base, we rely heavily on non-domestic services to produce goods for export.
That's not the same as what you're suggesting, that the "value add" from services misrepresents domestic consumption. Still, it makes for useful inference.