The ‘Paradox’ Of Protectionism
Paul Krugman says trade wars are a wash. Brad Delong is raising his neoliberal freak flag high. Who is right? Answer: Neither. Global output will rise under non-selective protectionism (or has an...
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Getting Paid To Have A Trade Deficit?
Source: BEA. Eric Lonergan has written an interesting post about US trade deficits on his blog Philosphy Of Money/Sample Of One. In the post Eric claims that the United States is not a debtor of the...
View ArticleNicholas Kaldor On The Foreign Trade Multiplier
This is the basis of the doctrine of the ‘foreign trade multiplier’, according to which the production of a country will be determined by the external demand for its products and will tend to be that...
View ArticleOutput At Home And Abroad
It’s fairly common for economists to confuse accounting identities and behavioural relationships. Question: What is the best way to find it? Answer: The behaviour of output (at home and abroad) is not...
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Milton Friedman On Free Trade
I always like watching Milton Friedman, not because I like him but for something totally opposite. It helps in knowing what the exact position of economists is. Milton Friedman has been hugely...
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Do US Trade Deficits Result In “Net Profits” For The US?
It’s frequently claimed that the US has trade deficits but since the US dollar has not collapsed, the ones saying that the US does not have a balance of payments constraint are all wrong. Now there...
View ArticleThe Treaty Of Rome And Balanced Trade
Policy Research in Macroeconomics (PRIME)’s blog Prime Economics reminds us of the Treaty of Rome, to establish a European Economic Community, first signed in 1957 which has a Chapter on Balance of...
View ArticleNeochartalists Shifting Positions
In a three part series, Bill Mitchell, makes the case against free trade. While this is most welcome – success and failure of nations depends on success in international trade via the principle of...
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Euro Area NCBs’ TARGET2 Balance As Cumulative Accommodating Item In The...
There’s a discussion on Nick Rowe’s blog about the interpretation of TARGET2 balances of the NCBs in the Euro Area’s Eurosystem. How do we interpret this? My answer is the headline. TARGET2 balances...
View ArticleDean Baker On US Manufacturing And International Trade
The U.S. manufacturing deficit was $831 billion in 2015. The 2016 number might be out in a few days. Dean Baker has an excellent article, Painful Nonsense on Trade on his blog in which he debunks the...
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Two Hundred Years Of Ricardian Trade Theory
Ingrid Kvangraven has a nice article, 200 Years of Ricardian Trade Theory: How Is This Still A Thing? on the blog, Developing Economics. In that, she asks how “the observation of persistent imbalances...
View ArticlePublic Debt And Current Account Deficits
Yesterday, there was an article at Vox which takes issue with a statement from Donald Trump which connects the US public debt with current account deficits. Trump ran his campaign on dividing people,...
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The Economist On Germany’s Balance Of Payments
The Economist‘s latest cover is about the German balance of payments. The subheading of its editorial says, that it “[t]he country saves too much and spends too little”. That’s welcome, although the...
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Public Debt And Current Account Deficits, Part 2
This is a continuation of a recent post at this blog, Public Debt And Current Account Deficits, in which I argued that the current account balance of payments affects the public debt. A usual objection...
View ArticleHow The Economist‘s Cover Story Is Causing Discomfort
The recent cover story of The Economist on Germany’s trade surpluses—titled The German Problem: Why Germany’s Current-Account Surplus Is Bad For The World Economy— is the biggest concession the...
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Measuring Global Production And Competitiveness
Imagine a firm F1 in the United States , which sells, say, toys. The firm is solely American, insofar as the employees of this firm and factory location are concerned. But the firm also exports toys...
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Christine Lagarde On Germany’s Balance Of Payments
Yesterday, there was a joint conference, Germany – Current Economic Policy Debates, jointly organized by the German Bundesbank and the IMF. Christine Lagarde wrote an article, Three German Economic...
View ArticleWynne Godley And Non-selective Protectionism
With Donald Trump threatening to impose tariffs and even retaliate on threats of retaliation, talks of protectionism is everywhere. It’s ironical that it took Trump to do this. The usual criticism of...
View ArticleA Comment On Wynne Godley And Non-selective Protectionism On The Article XII...
Nick Edmonds commented on my post Wynne Godley And Non-Selective Protectionism—which documented all the references where Wynne Godley proposes the usage of the Article XII of the GATT—pointing out that...
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Euro Area Balance Of Payments, Again!
… But more disturbing still is the notion that with a common currency the ‘balance or payments problem’ is eliminated and therefore that individual countries are relieved of the need to pay for their...
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