The Noisy Driver of Economic Growth: Exports

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Oh come on now ... really?

Much of the rise in exports is a consequence of domestic problems. The value of the dollar has declined, so that foreigners save money when they buy American. Businesses, struggling to find customers here, are focusing on foreign sales. And a boom in commodity prices, which has raised the price of life for most Americans, has produced a windfall for those who trade in commodities.

Read the entire outlook here.  As always, the comments are intriguing (like the one shown above).

Gear Up For Globalization: Answers From Real People

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Question from:

Laurel Delaney, Founder and President, GlobeTrade:

"Do you think Ex-Im Bank will cut back or be more willing to extend loans to SMEs (that qualify on exports) this year in light of a possible recession?"

Answer from:

Chad Moutray, Chief Economist & Director of Economic Research, U.S. Small Business Administration, Office of Advocacy:

"Small businesses are increasingly sophisticated global players who are able to spot opportunities, whether these are found in their local communities or across the globe. The depreciated dollar has given entrepreneurs -- many of whom had not looked at the export market before -- a golden opportunity to pursue sales abroad."

Regarding the possibility of a downturn, Moutray referred us to this study (be prepared for an immediate PDF file download) by Craig and Kohlhase that had been released in December 2006. Note the research summary's overall finding: "Small firms play a vital role in maintaining economic growth in urban areas."

Moutray does not follow the movings of the Ex-Im Bank so there was no comment on the loan policy.

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Add on from LD (1/26/08): Interesting "definition" of Export-Import (Exim) Bank at Answers.com.