tag:blogger.com,1999:blog-8595404115121834255.post5091926750989323818..comments2024-03-28T03:24:05.678-04:00Comments on NAKED KEYNESIANISM: Always hopeful for signs of intelligent lifeMatias Vernengohttp://www.blogger.com/profile/09521604894748538215noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-8595404115121834255.post-68050005482100975182011-06-08T12:18:07.579-04:002011-06-08T12:18:07.579-04:00From that paper http://www.levyinstitute.org/publi...From that paper http://www.levyinstitute.org/publications/?docid=1109<br /><br /><em> The prospects for the U.S. economy have become uniquely dreadful, if not frightening. In this paper we argue, as starkly as we can, that the United States and the rest of the world’s economies will not be able to achieve balanced growth and full employment unless they are able to agree upon and implement an entirely new way of running the global economy. Yet we should admit up front that while we feel able to outline the nature and magnitude of the emerging crisis, and even to set down some of the things that must happen in order to counter it, we have few solid suggestions as to how these changes can be brought about at present. </em><br /><br /><em>... </em><br /><br /><em>By our reckoning (which is put forward with great diffidence), if the United States were to attempt to restore full employment by fiscal and monetary means alone, the balance of payments deficit would rise over the next, say, three to four years, to 6 percent of GDP or more—that is, to a level that could not possibly be sustained for a long period, let alone indefinitely. Yet, for trade to begin expanding sufficiently would require exports to grow faster than we are at present expecting, implying that in three to four years the level of exports would be 25 percent higher than it would have been with no adjustments. It is inconceivable that such a large rebalancing could occur without a drastic change in the institutions responsible for running the world economy—a change that would involve placing far less than total reliance on market forces. </em>Ramananhttps://www.blogger.com/profile/11123448543333785121noreply@blogger.comtag:blogger.com,1999:blog-8595404115121834255.post-29242488377901042512011-06-08T11:20:36.132-04:002011-06-08T11:20:36.132-04:00Steve,
Good talk overall and you are right about ...Steve,<br /><br />Good talk overall and you are right about what Dudley has missed out. <br /><br />The "Global Imbalances" problem is important and even Tim Geithner seems to understand it.<br /><br />The work of Godley is really important in addition to sectoral balances, because as he and his colleagues argued, its "A Crisis That Conventional Remedies Cannot Resolve".Ramananhttps://www.blogger.com/profile/11123448543333785121noreply@blogger.com