There are measures to deal with all of these difficulties, but the most compelling long-term plans for increasing productivity cannot be decreased to a single formula. Sadly, part of the conventional political response to an economic change is the desire that something is arranged immediately. And, during the continuing economic difficulties, there is a system that seems to have served well so far: currency devaluation.
It is a strategy that has had victory in Japan, where a vulnerable yen is the only true success of Abenomics, and in Europe, where a vulnerable euro is serving to stave off depression. Europeans also like to keep that a vulnerable dollar was back the US economy’s speedy rebound. Now it is China’s turn to believe that currency devaluation will improve it recapture competitiveness.
The problem, of course, is that all nations’ currencies cannot devalue together. In the consequence of the Great Depression, attempts to do exactly that strained authorities to use frequently protectionist business plans, squeezing growth for times. The protectionist pressure has been removed from the acknowledgment to the contemporary change so far, but that could increase.
