balance of payments

Sergio Cesaratto On TARGET2 Balances

3 October 2015

Sergio Cesaratto has posted a reply on Matias Vernengo’s blog, replying to a paper by Marc Lavoie on economic problems of the Euro Area For previous discussions, see the citations in that post or see my previous post on this. Marc’s point is that because TARGET2 allows unlimited and uncollateralized credit/debit facilities between Euro Area […]


Sergio Cesaratto’s Debate With Marc Lavoie On Whether The Euro Area Crisis Is A Balance-Of-Payments Crisis – II

14 September 2015

This is a continuation of the post from the end of 2014, although reading that isn’t necessary.  In a new paper, Marc Lavoie continues his debate with Sergio Cesaratto on whether the Euro Area crisis is a balance-of-payments crisis or not. For the sake of completeness, here’s the list of papers, with references copy-pasted from Marc’s […]


Economists Can Be So Wrong

14 August 2015

Oh boy! Krugman could not have been more wrong about Macroeconomics than what he said recently in his blog The Conscience Of A Liberal for The New York Times. In a blog post, Competitiveness And Class Warfare, he concludes: International competition is a mostly bogus notion; … In a sense it is not surprising. Paul Krugman has done […]


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 […]


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 […]


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 […]


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 […]


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 […]


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 […]


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 […]