• 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...


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.


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.


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)

    high to the point mass numbers of people began to default on their mortgages which lead to the credit crunch as banks and investment firms became bankrupt this is can be observed on the diagram as inflation rate sharply decrease from the 3rd quarter of 2008.

  2. Peer reviewed

    Stimulating an economy in recession

    5 star(s)

    is a component of AD and would then lessen the impact of recession. This is shown in figure III as AD shifts from AD1 to AD2. To stimulate an economy in recession using the AS curve supply side policies are used.

  1. Indian Economics

    Economic Growth = Size of output (Quantitative Aspect) Economic Development = Economic Growth + Economic welfare. (A Qualitative Aspect) Growth of National Income and Per Capita Income refers to Quantitative rise in National Income and Per Capita Income over the planning period. However, economic Development in India is very slow over the planning period.

  2. What ended hyperinflation in Germany, Austria and Hungary in the 1920s? Do the facts ...

    Rentenbank took over the note issue function of the Reichsbank and put limits on the total volume of rentenmarks that could be issued, 3.2 billion marks, as well as the maximum amount that the government could borrow, 1.2 billion marks.

  1. Examine the arguments for a freely floating exchange rate

    A country's current account on the balance of payments may move into disequilibrium. Different exchange rate systems have different ways of returning the balance of payments back into equilibrium. The movement back often involves economic costs, such as increased unemployment, which can occurred under the Gold Standard System or lower

  2. How have the Rates of Inflation in the UK Changed Since the Monetary Policy ...

    should cause an increase in inflation elsewhere, in fact it will cause the decrease that has been explained in the theory section. Another interesting point that can be seen in both graphs 1 and 2 is that inflation was so high in the early 1990's.

  1. Why does smoking lead to an external cost?

    It can also be put towards other merit goods- goods which are underprovided by the government (goods which people think should be provided in greater quantities) and create large quantities of positive externalities such as education which creates external benefits.

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

    The Pitchford thesis argues that is the CAD and foreign liabilities are caused mainly by the private sector then there is no need for concern. Achieving external stability has times been the most important objective of economic policy in Australia.

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