What is the meaning of "Beggar Thy Neighbour"?

Since Beggar Thy Neighbour has been chosen as the name for this blog, the obvious question is: What does it mean? "Beggar-thy-neighbour" policies have been defined differently, but at the core all definitions agree on them being policies by which a country attempts to strengthen its domestic economy at the cost of foreign economies.

The most widely known "beggar-thy-neighbour" policy is a competitive currency devaluation. By devaluing the domestic currency against the currencies of international trade partners, countries effectively support the exports of their local businesses, because exports become cheaper for foreign entities. Foreign exchange research has found that currency devaluations do not necessarily have this positive effect on the domestic trade balance, though -- especially in the short run. However, as supply and demand may only slowly adjust to exchange rate changes, currency devaluations have been found to be more effective in the long run ("volume effect" versus "price effect"). Of course, this improvement of the trade balance comes at the cost of foreign countries' balances. That is why foreign countries often decide to respond by devaluing their own currency. This can lead to a vicious circle dynamic known as a currency war, meaning that two or more economies decrease the value of their currencies, in essence triggering a new round of currency devaluations by the other countries. Obviously, this cannot possibly go on forever. Most governments and central banks have therefore been careful about utilizing this particular tool from the "beggar-thy-neighbour" toolbox in the recent past.

Another "beggar-thy-neighbour" policy, which is possibly used more often, are protective trade barriers, such as tariffs and quotas on domestic imports. By putting such barriers in place, countries make it more expensive or even impossible for residents to import foreign goods or services, in effect creating an incentive to purchase domestic substitutes. This will increase the country's current account at the expense of foreign economies.