balance of payments

Balance Of Payments Adjustments

21 October 2013

Paul Krugman seems to have been thinking on issues related to open economy monetary macroeconomics these days! He has recently warned his readers to not confuse accounting identities with causation but in a recent blog post he seems to be doing it himself. So Krugman says: So, here we go. Start from the observation that the […]

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Balance Of Payments Crises

31 August 2013

Phil Pilkington takes an issue with Sergio Cesaratto on the usage of the phrase “balance-of-payments crisis” on problems of the Euro Area. Phil’s argument is that typically nations facing balance of payments problems need foreign currency and it manifests itself as a depreciation of the domestic currency but in the Euro Area this isn’t the […]

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Here’s Blaming The Rest Of The World For India’s Problems

30 August 2013

Recently India is going through a mini-crisis where its currency has plummeted and with hosts of other reasons such as high inflation and a dysfunctional government not just because of the ruling party but also because of the opposition. In all this corruption has risen a lot. During the last few weeks, the Reserve Bank […]

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Manmohan Violet Singh

3 August 2013

In a short recent speech, the Indian Prime Minister – the great man who steered the direction of the Indian economy in the early 1990s – says: The purpose of the study of economics is not to provide settled answers to unsettled and difficult questions, but sometimes to warn economists and the world-at-large, how not to […]

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Thomas Palley On International Coordination

11 July 2013

Thomas Palley has a new article Coordinate Currencies or Stagnate on international coordination of exchange rates. (h/t Matias Vernengo). He has a nice small critique of the Chicago school according to which “market forces” work toward resolving imbalances. It is great such a thing has been raised because the importance of policy coordination (in general – […]

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Nicholas Kaldor On Floating Exchange Rates

25 April 2013

Martin Wolf has a nice new column on imbalances creating troubles for the UK economy in the Financial Times: What a floating currency gives and what it does not. Why are current account deficits a haemorrhage in the flow of circular income? Weak external trade performance implies a drain in demand and hence pressure on the […]

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Euro Area Current Account Balances

17 April 2013

Always helps to look at actual data and remember it. From the IMF’s latest World Economic Outlook: (click to expand) Far away from rebalancing!

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Cyprus Rescue

30 March 2013

Cyprus has recently received the attention of academicians and financial professionals in recent weeks. Need I say that? So national bankruptcy is to be resolved by winding down a bank, moving guaranteed deposits (i.e., upto €100,000) to another and as per the latest Reuters article on this, big numbers (anywhere ranging from 20 to 40 per […]

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A Nation’s Net Indebtedness: An Example

8 February 2013

Over this thread at Matias Vernengo’s blog Naked Keynesianism, I got into an exchange about current account deficits and sustainability with an anonymous commenter – a topic I had blogged on recently in 2-3 posts. The commenter seems to not understand how this works or seems to believe that net indebtedness cannot keep rising relative to […]

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The Beggar-My-Neighbour Game

19 January 2013

How did Keynes and the Cambridge Keynesians (such as Joan Robinson, Richard Kahn, Nicholas Kaldor and Wynne Godley) think the world economy works? A few important principles relevant here and of course not exhaustive: First, real demand, output and employment is determined by the fiscal and monetary policies of the government with the former having […]

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