Goldman's chief economist, Jan Hatzius, invokes sectoral balances as his reason why U.S. growth will accelerate next year.
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"...every dollar of government deficits has to be offset with private sector surpluses purely from an accounting standpoint, because one sector’s income is another sector’s spending, so it all has to add up to zero. That’s the starting point. It’s a truism, basically. Where it goes from being a truism and an accounting identity to an economic relationship is once you recognize that cyclical impulses to the economy depend on desired changes in these sector financial balances."
Read entire article here. |
It's what we, MMTers have known for a long time. Anyway, Warren says Haztius is reading his blog. Sure seems like it. (Maybe this one, too!)
Goldman's chart
