http://www.finance-investment.co.cc

Well I think net migration would probably increase the current account deficit, as they consume imports, but it depends on whether they are working or not as to how it would influence the current account deficit as a proportion of GDP. Furthermore, if they go and work in export sectors it might even improve both 😛

Ultimately, we only let people in who have a sufficient amount of capital (physical or human capital) and as a result, it would be a net improvement on our nations asset position – which is what actually matters.

“I notice some people on blogs suggesting that the government should “free up” migration to boost the property market (versus letting houses prices fall to an affordable level)”

In the long-term it won’t have as much impact on the value of a house – as it will just lead to more construction. This presumes that we have sufficient land to build on – given our small population I’m sure it could be sorted out 🙂

I don’t see why we have to try and leave house prices over-inflated. People have been saying the values didn’t match fundamentals for a long time – why should we reward people for ignoring this? Furthermore, why should non-house owners help pay for someones house>

Yes, but they are not a substitute for imports – as Paul discusses in more detail on his blog.

http://antidismal.blogspot.com/2008/07/imports-good-exports-bad.html

“The other thing is that you can’t assume happiness flows from consumerism or you might call someone like Imelda Marcos the happiest woman in the world.”

You are confusing one persons benefit with anothers – we can’t compare the happiness people get from consumption, but we can say that an individual benefits from consuming more.

Mixing up the two is a cardinal sin in economics, but I’ll figure you this time 😉

“Claim 2 Frog assumes demand increasing while supply declines (Peak Oil) and is probably referring to more rail over trucking. Walkable cities, better buildings etc.”

Sure, but if that is the case they should face peak oil directly, instead of trying to weasel it into every discussion. Just because something may have a good unintended consequence does not mean its a good policy!

“What I don’t understand is how the system corrects a trade imbalance the dollar falls?”

The assumption is that, overtime, the value of exports will rise more than the value of imports from a fall in the dollar – and as a result the trade balance will improve. This appears to hold empirically, so people are pretty happy with it.

“What part does a globalised real estate market play?”

It depends. It could influence consumption by equalising rates of return on housing among different countries. If we want to talk about the current account, It could influence the capital account by either allowing purchases here, or leading to purchases overseas which create a dividend (rent).

Why do you ask?

But people spend most of their lives at work so how they earn their living and all the elements leading to job satisfaction are important also.
The other thing is that you can’t assume happiness flows from consumerism or you might call someone like Imelda Marcos the happiest woman in the world.
Sure the comparative advantage thing stands as far as the basic items go but then it gets silly.

Claim 2 Frog assumes demand increasing while supply declines (Peak Oil) and is probably referring to more rail over trucking. Walkable cities, better buildings etc.

What I don’t understand is how the system corrects a trade imbalance the dollar falls?
What part does a globalised real estate market play?