A Ukrainian government holding its wealth in US dollars just arrogated more purchasing to itself. It finances that arrogation by immiserating everyone else at home.
Chinese have done similar as have others. And we are going in that direction by printing money. A dollar in 1900 would buy a lot more than a dollar now. And yes, we pay that price as a hidden tax. Recall savings account paying 0.5% interest losing money steadily. The US by policy has inflated ~ 2% yearly to cover the difference between typical (pre-Obama) revenue 20% o0f GDP vs spending ~22% GDP. That built-in hidden tax once covered the growth in deficit spending. That went out the window as Obama had the boomer time bomb hit during a recession. By doing many of the wrong things we have never recovered the $14T in paper that disappeared back then.
I believe Ukraine is still exporting wheat and minerals such as iron ore. There are practical problems but I think it is happening.
I'm not an economist but am I right in saying that for some transactions between ordinary Ukrainians there shouldn't be an increase in price for products and services which were sourced within the country? It would only affect imported goods.
I understand the proposition and the question. In my short essay, the phrase "unit of account" does a lot of work. (!) But now we can see how prices adjust post-devaluation...
Also, I sometimes look up futures markets, especially for agricultural commodities. Prices remain a little elevated (compared to prices over the last year), but they have definitely come back to earth. Ukrainian product might be getting out, possibly through alternative channels. Buyers around the globe may have done a good of what they do every season: adjust their sourcing as one country has a good harvest and another has a bad harvest, etc.
Chinese have done similar as have others. And we are going in that direction by printing money. A dollar in 1900 would buy a lot more than a dollar now. And yes, we pay that price as a hidden tax. Recall savings account paying 0.5% interest losing money steadily. The US by policy has inflated ~ 2% yearly to cover the difference between typical (pre-Obama) revenue 20% o0f GDP vs spending ~22% GDP. That built-in hidden tax once covered the growth in deficit spending. That went out the window as Obama had the boomer time bomb hit during a recession. By doing many of the wrong things we have never recovered the $14T in paper that disappeared back then.
Yes. Well said. We had been able to manage the mushy, dynamic budget constraint ...
I believe Ukraine is still exporting wheat and minerals such as iron ore. There are practical problems but I think it is happening.
I'm not an economist but am I right in saying that for some transactions between ordinary Ukrainians there shouldn't be an increase in price for products and services which were sourced within the country? It would only affect imported goods.
I understand the proposition and the question. In my short essay, the phrase "unit of account" does a lot of work. (!) But now we can see how prices adjust post-devaluation...
Also, I sometimes look up futures markets, especially for agricultural commodities. Prices remain a little elevated (compared to prices over the last year), but they have definitely come back to earth. Ukrainian product might be getting out, possibly through alternative channels. Buyers around the globe may have done a good of what they do every season: adjust their sourcing as one country has a good harvest and another has a bad harvest, etc.