Greenland's balance of Payments and Self-governance

    Research output: Contribution to conferencePaperResearch

    Abstract

    Why is the current account of Greenland a topical issue, while those of Denmark and of the island of Bornholm in the Baltic Sea are not? Has the current account anything to do with future inde­pendence? It is ar­gued that balance of payments and foreign debt are closely connected to political and eco­nomic national identi­ty. Until recently Greenland's current account was positive by large amounts, which were unex­plained, as it proved impos­sible to uncover corresponding capital account defi­cits. However, im­proved balance of payments statistics together with sim­ple compu­tations demonstrate that sur­pluses partly disap­pear as an arti­fact if contents of imports of the various types of final demand are in­creased in accordance with the recent input output-table of Greenland. It is illustrated that discontinuation of transfer payments from Denmark would entail dramatic downfalls of produc­tion and living standards and large current account deficits. It is possible to remove the trade balance deficit and the need for Danish transfers simultaneously, but this would require higher tax rates and huge increases of exports.
    Why is the current account of Greenland a topical issue, while those of Denmark and of the island of Bornholm in the Baltic Sea are not? Has the current account anything to do with future inde­pendence? It is ar­gued that balance of payments and foreign debt are closely connected to political and eco­nomic national identi­ty. Until recently Greenland's current account was positive by large amounts, which were unex­plained, as it proved impos­sible to uncover corresponding capital account defi­cits. However, im­proved balance of payments statistics together with sim­ple compu­tations demonstrate that sur­pluses partly disap­pear as an arti­fact if contents of imports of the various types of final demand are in­creased in accordance with the recent input output-table of Greenland. It is illustrated that discontinuation of transfer payments from Denmark would entail dramatic downfalls of produc­tion and living standards and large current account deficits. It is possible to remove the trade balance deficit and the need for Danish transfers simultaneously, but this would require higher tax rates and huge increases of exports.
    LanguageEnglish
    Date2010
    Number of pages30
    StatePublished - 2010
    EventInternational Polar Year Oslo Science Conference - Oslo, Norway
    Duration: 7 Jun 201012 Jun 2010

    Conference

    ConferenceInternational Polar Year Oslo Science Conference
    CountryNorway
    CityOslo
    Period07/06/201012/06/2010

    Cite this

    Aage, H. (2010). Greenland's balance of Payments and Self-governance. Paper presented at International Polar Year Oslo Science Conference, Oslo, Norway.
    Aage, Hans. / Greenland's balance of Payments and Self-governance. Paper presented at International Polar Year Oslo Science Conference, Oslo, Norway.30 p.
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    Aage, H 2010, 'Greenland's balance of Payments and Self-governance' Paper presented at, Oslo, Norway, 07/06/2010 - 12/06/2010, .

    Greenland's balance of Payments and Self-governance. / Aage, Hans.

    2010. Paper presented at International Polar Year Oslo Science Conference, Oslo, Norway.

    Research output: Contribution to conferencePaperResearch

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    N2 - Why is the current account of Greenland a topical issue, while those of Denmark and of the island of Bornholm in the Baltic Sea are not? Has the current account anything to do with future inde­pendence? It is ar­gued that balance of payments and foreign debt are closely connected to political and eco­nomic national identi­ty. Until recently Greenland's current account was positive by large amounts, which were unex­plained, as it proved impos­sible to uncover corresponding capital account defi­cits. However, im­proved balance of payments statistics together with sim­ple compu­tations demonstrate that sur­pluses partly disap­pear as an arti­fact if contents of imports of the various types of final demand are in­creased in accordance with the recent input output-table of Greenland. It is illustrated that discontinuation of transfer payments from Denmark would entail dramatic downfalls of produc­tion and living standards and large current account deficits. It is possible to remove the trade balance deficit and the need for Danish transfers simultaneously, but this would require higher tax rates and huge increases of exports.

    AB - Why is the current account of Greenland a topical issue, while those of Denmark and of the island of Bornholm in the Baltic Sea are not? Has the current account anything to do with future inde­pendence? It is ar­gued that balance of payments and foreign debt are closely connected to political and eco­nomic national identi­ty. Until recently Greenland's current account was positive by large amounts, which were unex­plained, as it proved impos­sible to uncover corresponding capital account defi­cits. However, im­proved balance of payments statistics together with sim­ple compu­tations demonstrate that sur­pluses partly disap­pear as an arti­fact if contents of imports of the various types of final demand are in­creased in accordance with the recent input output-table of Greenland. It is illustrated that discontinuation of transfer payments from Denmark would entail dramatic downfalls of produc­tion and living standards and large current account deficits. It is possible to remove the trade balance deficit and the need for Danish transfers simultaneously, but this would require higher tax rates and huge increases of exports.

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    Aage H. Greenland's balance of Payments and Self-governance. 2010. Paper presented at International Polar Year Oslo Science Conference, Oslo, Norway.