balance of payments

Federal Government And Regional Balance Of Payments

25 July 2015

The Financial Times has a column titled Europe’s Fiscal Union Envy Is Misguided. The author echoes a recent article in The New York Times (referred here in my blog). According to the FT columnist, in the United States, … The bulk of the risk-sharing happens through credit and capital markets – that is to say, private lending, borrowing and investment returns do […]

READ MORE >>

Interest Rate, Growth And Debt Sustainability

7 April 2015

Frequently, discussions about debt sustainability have discussions about the importance of the interest rate and growth in debt sustainability analysis. See for example, today’s Paul Krugman’s post on his blog. It is concluded that as long as the rate of interest is below the rate of growth, the ratio public debt/gdp doesn’t explode. Unfortunately, this […]

READ MORE >>

The U.S. Net International Investment Position At The End Of 2014 [Updated]

1 April 2015

The U.S. Department of Commerce’s Bureau of Economic Analysis today released accounts for the United States’ international investment position. The U.S. is sometimes called the world’s biggest debtor and its net international investment position is now (at the end of 2014) minus $6.9 trillion. Here’s the chart from the BEA’s website. A few points. The importance of […]

READ MORE >>

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 […]

READ MORE >>

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 […]

READ MORE >>

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 […]

READ MORE >>

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 […]

READ MORE >>

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 – […]

READ MORE >>

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 […]

READ MORE >>

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!

READ MORE >>