Economics LINKS
Cost push inflation
Recession
Cyclical Unemployment
Imports Increase [lower NX]
Recession
Cyclical UE
Increase in supply of currency
Depreciation
Cost push inflation [Expensive imports] {Imported Inflation}
Recession
Current Account Surplus
Higher NX; Higher GDP Cyclical employment
Access to foreign assets
Demand-pull inflation
Economic Growth
Cyclical Employment
Living standards improve
Industrialisation
Negative externalities
Economic growth
Increase in revenues
Investment expeniture #
Increased productivity in LR
EoS: Average Costs decrease
Prices decrease
Exports/NX increase
Increased foreign demand for domestic goods
Current account deficit [net lender]
Trade protectionism
Retaliation
Exports/NX decrease
Current Account Deficit
Imports decrease NX increases
Decease in supply of local currency
Economic Growth
Domestic firms sales are low
domestic employment low
If more imports of capital goods then higher potential output in LR
Current account surplus
Appreciation in ER