Stupid question about inflation

[Ayahuasca]

and exports.

Take a Rangerover built in the UK and sold abroad.

The UK economy receives an injection of cash that originated in a separate economy. Therefore the UK economy has more cash in the system.

So is exporting, or more specifically a positive balance of trade, per se inflationary?

??

I don't know why I need to know this, but it is bugging me.

[fido]

No it isn't inflationary because no new stirling (£) is created - it's merely exchanged or handed over from johnny foreigner to someone here.

[jdw1234]

Ayahuasca said:

and exports.

Take a Rangerover built in the UK and sold abroad.

The UK economy receives an injection of cash that originated in a separate economy. Therefore the UK economy has more cash in the system.

So is exporting, or more specifically a positive balance of trade, per se inflationary?

??

I don't know why I need to know this, but it is bugging me.

But, would that not lead hypothetically be counteracted by increased wages as company performance improves?

Unlike just the cost of living going up by increased commodity costs and import costs via devaluing pound?

[RichardD]

Ayahuasca said:

and exports.

Take a Rangerover built in the UK and sold abroad.

The UK economy receives an injection of cash that originated in a separate economy. Therefore the UK economy has more cash in the system.

So is exporting, or more specifically a positive balance of trade, per se inflationary?

??

I don't know why I need to know this, but it is bugging me.

It should be, as in the case of China, but if the gubbermunt of that country controls the currency then it doesn't happen.

It wasn't that long ago that the Bank of Japan took measures to control Yen appreciation to protect its exporters.

On the opposite note, a when a trade deficit is run, the gap has to be plugged by increased debt. This is why I think this country seems rather dependant on rising house prices!

[s2art]

Ayahuasca said:

and exports.

Take a Rangerover built in the UK and sold abroad.

The UK economy receives an injection of cash that originated in a separate economy. Therefore the UK economy has more cash in the system.

So is exporting, or more specifically a positive balance of trade, per se inflationary?

??

I don't know why I need to know this, but it is bugging me.

It has the potential to be, because its increasing the amount of money in circulation in the UK. Or at least it can do that. Of course that money could just be spent on increased imports. Generally speaking it has a limited impact on inflation because the currency will appreciate if there is a positive balance of trade, one thing that the Euro prevents in the Eurozone. Its a natural corrective measure that has cost Ireland, Greece, Portugal etc badly.