flow of funds

Credit And Economic Growth

17 September 2014

In a new column for Bloomberg, Noah Smith questions the intuition that credit fuels economic growth. He says: It seems like the only people who don’t instinctively believe in credit-fueled growth are academic economists. The academics have good reason for being skeptical. His reason (in short) is the following: It’s pretty obvious how credit drives […]

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Profits And Borrowing

4 April 2014

I think Marshall Auerback is seriously mixing up different parts of the flow of funds accounts of an economy. He is heteredox, so it will be good if he gets these things right. In his latest, he asks Why Are US Corporations Borrowing So Much If Profits Are At A Record Percentage Of GDP?, i.e., the […]

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Paradox Of Profits?, Part 2

25 March 2014

In the previous post Paradox of Profits?, I mentioned how I view the paradox of profits as the confusion between production firms’ operating surplus (as defined in the SNA such as the 2008 SNA or earlier versions) and surplus on the financial account of the system of national accounts. The paradox is highlighted by saying that at the […]

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Paradox Of Profits?

22 March 2014

Post-Keynesians unnecessarily worry a lot about the paradox of profits. This post is on my thoughts on the paradox. In my view, there is no paradox at all. It is simply the case of not looking at all the parts of the system of national accounts/flow of funds. Although Post-Keynesians use Kalecki’s profit equation in […]

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Massive Overstatement Of Profits?

6 March 2014

In an article, The Profits’ Conundrum, Marshall Auerback uses Kalecki’s profit equation analysis (which is just a simple rearrangement of terms of the sectoral balances equation) to claim that corporate profits have been overstated in the United States. Now consider the US deficit and explain how on earth we can still have profits as a […]

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Tobinesque Models

15 February 2014

Paul Krugman writes today on his blog on James Tobin’s work: Let me offer an example of how this ended up impoverishing macroeconomic analysis: the strange disappearance of James Tobin. In the 1960s Tobin developed and elaborated a sophisticated view(pdf) of financial markets that offered insights into things like the role of intermediaries, the effects of […]

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Augusto Graziani And The Theory Of The Monetary Circuit

9 January 2014

One of Augusto Graziani’s best papers was The Theory Of The Monetary Circuit, Économies et Sociétés, 24 (6) (June), pp. 7–36. The paper is available at the UMKC course site here. One description of money is looking at payments as triangular transactions. Graziani says that for money to exist, three conditions have to be met: since money cannot […]

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A Clueless Sveriges Riksbank Prize Winner

14 October 2013

The subject of money, credit and moneyflows is a highly technical one, but it is also one that has a wide popular appeal. For centuries it has attracted quacks as well as serious students, and there has too often been difficulty in distinguishing a widely held popular belief from a completely formulated and tested scientific […]

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Flow Of Funds And Keynesian Macroeconomics

15 September 2013

The subject of money, credit and moneyflows is a highly technical one, but it is also one that has a wide popular appeal. For centuries it has attracted quacks as well as serious students, and there has too often been difficulty in distinguishing a widely held popular belief from a completely formulated and tested scientific […]

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Flow Of Funds: New Look

7 June 2013

The United States Statistical Release Z.1 now has a new look and more data. It now includes the Integrated Macroeconomic Accounts. According to the Intergated Macroeconomic Accounts site (which was available separately but online only): These tables present a sequence of accounts that relate production, income and spending, capital formation, financial transactions, and asset revaluations […]

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