Difference between revisions 109724556 and 109724558 on dewiki

{{unreferenced||date=June 2006}}

'''Beggar thy neighbour''', or beggar-my-neighbour, policies seek benefits for one country at the expense of others.  Such a policy attempts to remedy an [[economic]] problem in one country by means which tend to worsen the problems of other countries.  The term was originally devised to characterize policies of trying to cure [[domestic]] [[depression (economics)|depression]] and [[unemployment]] by shifting effective demand away from imports onto domestically produced goods, either through [[tariffs]] and [[quotas]] on [[imports]], or by competitive [[devaluation]].  More recently, beggar thy neighbour policy has taken the form of reducing domestic [[inflation]] through currency [[appreciation]].  This improves the [[terms of trade]] and thus reduces cost-inflationary pressure in the appreciating country but tends to increase cost inflation in the country's trading partners.

Tax haven activities are another example: one country allows another country's citizens or corporations to avoid or evade taxes, harming the other country's ability to raise taxes according to voters' wishes.  "Beggar thy neighbour" strategies of this kind don't only apply to countries: overgrazing provides another example, where the pursuit by individuals or groups of their own interests leads to sub-optimal outcomes.  This dynamic is also known as the "[[tragedy of the commons]]."

== See also ==
* [[Domestic policy]]
* [[Economic policy]]
* [[Monetary policy]]
* [[International trade]]
* [[Balance of trade]]

[[Category:International economics]]