• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Export Essay

Extracts from this document...

Introduction

Explain why the recent devaluation of the � has not resulted in a significant improvement in the export performance of the UK. (25 Marks) Under normal circumstances a devaluation of the pound should make exports more price competitive and lead to greater export performance with greater quantities being sold. However this may not always be the case and might not always lead to a fall in the value of products imported. A fall in the exchange rate should lead to an improvement in the current accounts however following recent figures this is not true. Over the past few years given the 25% devaluation in sterling our export performance is not that impressive. ...read more.

Middle

Another reason it seems is that Britain's main trading partners have been stuck in low or no growth and are therefore unable to buy more goods and services. Here the main problem is seen as the British government. It doesn't emphasise its export promotion. For example in Germany, Graham and Brown have two big rivals. They benefit from short term German government export credit guarantees stopping the risk that Russian customers will not pay, whereas the British government doesn't have such cover. So the point is that the British export credit guarantee department doesn't support foreign government. It is hard to compete overseas who do have protection. Also a thing about devaluations is that higher profitability is often seen as the first impact. ...read more.

Conclusion

In conclusion, the recent devaluation of the pound should have resulted in better UK export performance; however this was not the case. The recent recession has reduced demand from other countries to invest in our exports, also it is hard to compete overseas who do not protection and the initial impact of devaluation takes time to pick up. The major downfall in our exports was the recent recession which effected confidence in the economy. Overall the balance of payments has gone worse into a deficit at about -4 billion pounds in January 2010. This is due to imports being higher than exports and the recession caused other countries to endure a slow recovery and therefore our exports haven't increased as they should do in the circumstances of a devaluation of the pound. ?? ?? ?? ?? Economics (Macro) 25/04/2010 ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Macroeconomics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Here's what a star student thought of this essay

4 star(s)

Response to the question

This essay engages with the question at a good level, looking at why current external factors have an effect on exports. However, if I were doing this essay, I would've analysed why a depreciation of a currency would be expected ...

Read full review

Response to the question

This essay engages with the question at a good level, looking at why current external factors have an effect on exports. However, if I were doing this essay, I would've analysed why a depreciation of a currency would be expected to increase exports. There is suitable evaluation here, but a lack of analysis. Numerical analysis, such as looking at changing exchange rates would've been sufficient. I say this, as in my experience examiners cannot give you evaluation marks if there is no analysis to provide the foundations. Therefore, this essay risks getting low marks despite perceptive comments.

Level of analysis

The analysis present in this essay is sound, discussing why a recession will cause exports to decrease (and thus aggregate demand). There is good awareness that UK exports are reliant on global demand, thus a prosperous economy within the economy can still mean weak export levels. But, as mentioned above I feel there needed to be some analysis of how a depreciation should normally cause exports to increase. This could be done with some numerical analysis, looking at how exports will be come cheaper to foreign countries. This would've then led nicely to some evaluation saying that this depends on the currency exchange globally - if the UK depreciates, but other countries depreciate further, then there will be little effect. I liked the discussion of profitability, as this shows a strong awareness of firms' goals and the effect microeconomic decisions can have on the macroeconomy. Showing such skills will gain credit! If I was doing this essay, I would've explored whether UK exports are of high enough quality as another evaluative point.

Quality of writing

The structure of this essay is good, with there being a clear introduction and conclusion. The introduction lays out what should normally happen, which shows a strong awareness. I liked how the conclusion drawer upon the significance of weak export performance, even if this wasn't explicitly asked for in the question. Spelling, punctuation and grammar are strong, and technical terms are used confidently.


Did you find this review helpful? Join our team of reviewers and help other students learn

Reviewed by groat 13/03/2012

Read less
Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Macroeconomics essays

  1. Marked by a teacher

    The aim of this essay is to discuss the relevance of John Keynes to ...

    5 star(s)

    As can be seen from figure 1 above inflation rate has remained stable up till the year 2007. The UK central bank aims to keep inflation rate at 2% and according to figure 1 since the year 2005 to 2007 the central bank has been on or just within their target.

  2. Peer reviewed

    Stimulating an economy in recession

    5 star(s)

    Automatic stabilizers help during recession as it decreases the impact of the fall in economic activity. During recession unemployment increases and the government gives unemployment benefits to avoid further increase in unemployment. This would help limit the decrease in demand and have a positive impact on GDP as government spending

  1. Peer reviewed

    'The trade deficit on goods in the first three months of the year was ...

    4 star(s)

    These policies attempt to encourage consumers to switch their demand away from imports and towards the output of the domestic firms. This will only occur however if the relative price of imports can be raised, or if the relative price of UK products can be lowered.

  2. Has globalization been of benefit to the Singapore economy?

    cost of production since prices of imported goods increased from the competition for scarce raw materials like oil and steel by many countries. In addition, free trade makes Singapore's economy more vulnerable to external shocks such as current global financial crisis, as well as exposes Singapore to unfair trading practices which can impede its economic growth.

  1. Greece financial crisis: The main causes of this crisis are? What are ...

    The economy went into recession in 2009 and contracted by 2.0% as a result of the world financial crisis and its impact on access to credit, world trade, and domestic consumption--the engine of growth in Greece. High growth and low interest rates had masked major fiscal and structural weaknesses that were aggravated by the global financial crisis and ensuing recession.

  2. Outline any two main/priority issue that concern the Australian economy & discuss the effectiveness ...

    However, in more recent years, external stability has not been a major objective of macroeconomic policy. While both the commonwealth treasury and the Reserve Bank continue to monitor the level of the current account deficit, the foreign debt, and exchange rate, improving external stability is not used to guide fiscal or monetary policy settings.

  1. Why does smoking lead to an external cost?

    There are little or no alternatives to tobacco, the alternatives available are illegal and create equal amount of negative externalities. Perhaps the government should consider other alternatives to a high rate of tax such as making tobacco illegal, although this could cause heavy protesting.

  2. Pakistan is in the grip of a serious energy crisis that is affecting all ...

    Total generating capacity is 20 GWe and in 2006, 98 billion kWh gross was produced, 37% of it from gas, 29% from oil. Coal: Coal currently plays a minor role in Pakistan. s energy mix. However, Pakistan contains an estimated 3,362 million short tons (Mmst), sixth-largest in the world.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work