The new conventional wisdom is that the return foreigners obtain on U.S. assets is less than the return U.S. residents obtain on foreign assets. And that this means that the U.S. can build up a bigger foreign debt than traditional analyses; I’ve been skeptical [1], [2]. Now, we have more reason to ask how robust is the finding of a durable earnings differential in favor of U.S. investors?
Category Archives: deficits
Attaining Internal and External Equilibrium in China
China raises rates again. What will higher rates do?
Negative Net Income: The 2006 Balance of Payments
Most commentary on the 2006q4 current account balance release focused on the improvement in the overall balance. Little noted is the fact that 2006 is the first year in which the net income category has registered negative.
The January Trade Balance: Reading the Tea Leaves
Are declining capital imports growth rates an indicator of recession?
WMDs in Iraq, “Last throes…” and… “deficits don’t matter”
According to former Secretary of Treasury Paul O’Neill, Dick Cheney is reputed to have said: “…deficits don’t matter.”
(see Suskind’s The Price of Loyalty, and online here). What’s the (updated) evidence?
Fiscal Stimulus under Current Law and under a Probable Alternative
The CBO released The Cyclically Adjusted and Standardized Budget Measures last Thursday.
The December Trade Release: Beyond the Surprise
Almost old news, the February 13 BEA/Census release for December trade provided ample grist for the mill. Insightful perspective was provided by Brad Setser and David Altig. Here I try to add a few other insights.
Is a 12 Step Program Needed for Policymaking in Washington?
How to balance the Federal budget, Bush style
First, assume away expenses…
Manufacturing, Tradables, and Trade Adjustment
In his preview of the 2007 Economic Report of the President, CEA Chair Ed Lazear presented the argument that manufacturing output is still growing.