Re:Economist Bob Mundell has died
by Joker_vD on Tuesday April 06, 2021 @01:22PM
(#26714690)
Yes, imagine being a business in a country under the US sanctions. Without ability to import cheaper foreign parts, what would happen? In a country large enough one would imagine it would lead to the appearance of the home industry that would provide a substitute. More expensive, and of lower quality, sure, but Rome was not built in a single day.
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Re:Economist Bob Mundell has died
by JumpCrisscross on Tuesday April 06, 2021 @01:29PM
(#26714788)
> Without ability to import cheaper foreign parts, what would happen?
We'd lose the economies of scale that come with being a major exporter to Europe and South America, for starters. Which would lead to an R&D disadvantage. Which would further widen the gap. Strategically protecting industries is very different from blanket sanctions / capital controls.
That's why I said "large enough country", that'd would allow to retain the scale somewhat. And if you look at the examples of Iran/EU trade and Russia/EU trade, perhaps the exports won't even go down that much, so perhaps doubling down on R&D to keep being competitive would even be feasible.