Tag Archives: balance of payments

The assassination was intended to escalate America’s presence in Iraq to keep control the region’s oil reserves, and to back Saudi Arabia’s Wahabi troops (Isis, Al Quaeda in Iraq, Al Nusra and other divisions of what are actually America’s foreign legion) to support U.S. control o Near Eastern oil as a buttress o the U.S. dollar. That remains the key to understanding this policy, and why it is in the process of escalating, not dying down.  I sat in on discussions of this policy as it was...

I came across the CPES digital archive today. It has scans of papers which aren’t available elsewhere. There’s an interesting article Causes Of Growth And Recession In World Trade, there by Francis Cripps, in which he describes the Cambridge Keynesian idea of achieving balanced trade, because nations face a balance-of-payments constraint: The Case for Concerted ActionThe Cambridge Political Economy Society Digital ArchiveV. Ramanan

This blog post is written for a workshop I am participating in Germany on Saturday, October 13, 2018. The panel I am part of is focusing on external trade and currency issues. In this post, I bring together the basic arguments I will be presenting. One of the issues that is often brought up in relation to Modern Monetary Theory (MMT) relates to the foreign exchange markets and the external accounts of nations (particularly the Current Account). Even progressive-minded economists seem to...

Maybe the trade war with China isn't actually about MAGA at all, but just economic warfare against a rising competitor. If trade surplus are so "unfair," why is the focus not on Germany given the figures, enquiring minds want to know. Or, do Donald Trump and his economic team not realize this?Conversable EconomistSome Facts on Global Current Account BalancesTimothy Taylor | Managing editor of the Journal of Economic Perspectives, based at Macalester College in St. Paul, Minnesota

An essential but perhaps overlooked way of looking at the economy is a sector financial balance approach. Pioneered by the late UK economist Wynne Godley, this approach starts with National Accounts data (called Financial Flow Accounts) for four broad sectors of the economy: households, corporations, government and non-residents. Here’s how it works: in any given quarter or year each sector can be a net borrower or lender, but the sum of the four sectors’ borrowing/lending must equal to...

I had an impromptu debate with Warren Mosler, the founder and still one of the leading figures of "Modern Monetary Theory" recently. We disagreed on the role of trade deficits, and this has led another MMT luminary, Bill Mitchell, to write two commentaries critiquing my position (see "Trade and external finance mysteries – Part 1" and "Trade and finance mysteries – Part 2". This is my partial reply to Mitchell—there are more issues that I want to take up when I have time to do so.......

I was running late yesterday and the blog post was already rather long so I left some matters concerning central banks for today. The question we address briefly today is what is the role of central banks in all these trade transactions. Does an export surplus country face an ever increasing money supply as central banks provide the counterparty service to traders who sell in a foreign currency but want their own currency (such as a manufacturer who incurs costs in say Yen but sales revenue...

Recently, a colleague emailed with the following set of questions: ‘a balance sheet approach to defending currencies. Do you know literature that explains in detail the globally interlocking balance sheets between central banks, commercial banks and what happens when a national government has to defend its currency? What is the role of national and foreign reserves and how do they travel these balance sheets in the process of trying to defend a currency? I came back to this question when...

Insightful post on international finance. Short.The Case for Concerted ActionChristine Lagarde On Germany’s Balance Of Payments V. Ramanan

Why the US works with respect to internal trade among states while the EZ doesn't.Pragmatic CapitalismThe Balance of Payments in the USA Cullen Roche