Trade argument moved from the presidential poll thread

[Kidlicious]

You just said that the price of oil in the US increases and consumption decreases.

[Kidlicious]

You are pwned.

[KrazyHorse]

Originally posted by Kidicious
You just said that the price of oil in the US increases and consumption decreases.

Consumption of oil in the US decreases. Consumption of oil elsewhere increases. Pay attention.

[Kidlicious]

Originally posted by KrazyHorse


Consumption of oil in the US decreases. Consumption of oil elsewhere increases. Pay attention.

I'm not paying attention to that. I have no interest in discussing that matter with you. You said that if the dollars didn't return to the US that there would be no negative effect on the US economy. So you pwned yourself.

[KrazyHorse]

If the dollars don't return to the US that means that the terms of trade do not change. Therefore either the price of oil in USD does not increase or the price that furriners pay for the **** they import increases enough to offset the increase in the price of oil.

That is simple 'rithmetic.

[Kidlicious]

Originally posted by KrazyHorse
If the dollars don't return to the US that means that the terms of trade do not change. Therefore either the price of oil in USD does not increase or the price that furriners pay for the **** they import increases enough to offset the increase in the price of oil.

That is simple 'rithmetic.

The term of trade are going to change. A lower value of the dollar is going to change the TOT. Also, the price of oil is going to increase because of the falling value of the dollar (see graph). My whole point is that imports are going to cost more.

Now how exactly is this not suppose to hurt the US economy?

[KrazyHorse]

My whole point is that imports are going to cost more.

If imports cost more and exports cost less (a change in the terms of trade) this is precisely the same thing as saying that some of those green sheets of paper will come back to the US.

The paper coming back and the current account balance changing are precisely the same thing. This is the point.

[Kidlicious]

Originally posted by KrazyHorse
The paper coming back and the current account balance changing are precisely the same thing. This is the point.

Yes, that's how they left in the first place.

Now, that's not to say that they will come flooding back or not. That really doesn't matter. What matters is that imports will cost more (oil for example).

[snoopy369]

Originally posted by Kidicious


You can not have a (p,q) outside of the supply curve.

... and this is why real economists make fun of you, Kid.

1. Economics "laws" are not "laws that cannot be broken" like laws of physics. They describe how things work in perfect systems.

2. We do not live in a perfect system.

3. See (1).

... even if you were right about the supply curve, which you're not.

[Victor Galis]

If you don't understand the law of supply you probably won't understand this, but I'll post it anyway.

Value of dollar inversely related to value of an imported commodity whose demand isn't very price-sensitive. Shocking .

Now that the dollar is strengthening, due to a variety of factors, the price of oil has collapsed, but we're not seeing demand pick back up.

Yes, that would be because the fall in price is being driven by a lack of demand. If demand were to pick back up, the price movement wouldn't exist. (And yes, this reminds me of a time I looked stupid in front of my international trade class.)

A microeconomic law stating that, all other factors being equal, as the price of a good or service increases, the quantity of goods or services offered by suppliers increases and vice versa.

If the value of a dollar falls, the dollar price of all goods including oil should increase all other things being equal. So the producers can earn more dollars per barrel of oil... but they can't actually use those dollars to buy any more stuff than they could before. Why would production increase if the real value of oil didn't go up?

Real economists don't have to point out to other economists that the sky is blue and licking a hot curling iron is a bad idea. If they did then their arguments would resemble this a lot more than you think.

Real economists would assume the sky is green if it made their math simpler

[KrazyHorse]

What matters is that imports will cost more (oil for example).

If imports cost more and exports cost less (a change in the terms of trade) this is precisely the same thing as saying that some of those green sheets of paper will come back to the US.

[Kidlicious]

Originally posted by snoopy369


... and this is why real economists make fun of you, Kid.

1. Economics "laws" are not "laws that cannot be broken" like laws of physics. They describe how things work in perfect systems.

2. We do not live in a perfect system.

3. See (1).

... even if you were right about the supply curve, which you're not.

I'm not saying that the law of supply works all the time. I'm saying in this theoretical cause you have to assume that it does. Otherwise why would you even ever talk about the law of supply.

[Kidlicious]

Originally posted by Victor Galis
If the value of a dollar falls, the dollar price of all goods including oil should increase all other things being equal. So the producers can earn more dollars per barrel of oil... but they can't actually use those dollars to buy any more stuff than they could before. Why would production increase if the real value of oil didn't go up?

I was arguing that if the dollar falls in value that producers would tend to produce less, ceterus parabus.

[Kidlicious]

KH,

This is a debate about free trade. I beat you like a red-headed step child. Now go away.

[snoopy369]

Originally posted by Kidicious


I'm not saying that the law of supply works all the time. I'm saying in this theoretical cause you have to assume that it does. Otherwise why would you even ever talk about the law of supply.

Wait, so in order to prove your point you're making an assumption that most certainly does not hold?

You went to Princeton, didn't you.