Joseph P. Joyce — Current Account Deficits and Safe Assets

Global appetite for US Treasuries as "safe assets." This is a primary function of a reserve currency as a saving vehicle that is regarded as a safe haven.

Economonitor
Current Account Deficits and Safe Assets
Joseph P. Joyce

Ramanan — 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.

The Case for Concerted Action
Public Debt And Current Account Deficits, Part 2
V. Ramanan

Xinhua — Spotlight: Trump gets them wrong, from trade balance to basic economics

The Chinese news service weighs in on Trump.

Xinhua
Spotlight: Trump gets them wrong, from trade balance to basic economics

Kenneth Thomas — U.S. Trade Deficit Largely Due to "Intra-Firm" Trade

The vast majority of the U.S. $727 billion trade deficit in goods for 2011 is due to "intra-firm" or "related party" trade, that is, trade between two units of the same corporation, according to the U.S. Census Bureau. This is significant because such trade is the most open to companies manipulating the prices between subsidiaries to minimize tax liabilities, usually known as abusive transfer pricing. Moreover, asStuart Holland argued in 1987, intra-firm trade is also less responsive to changes in exchange rates than is trade between independent businesses, since within an individual multinational corporation each subsidiary will have a specific role to play in its supply chain, which won't be quickly changed.

Angry Bear
U.S. Trade Deficit Largely Due to "Intra-Firm" Trade
Kenneth Thomas | Associate Professor of Political Science, University of Missouri-St. Louis

Thomas Palley — A Keynesian Theory of Hegemonic Currencies – Or Why the World Pays Dollar Tribute

Several years ago (June 2006) I wrote an article advancing a new theory of why the dollar is the world’s dominant currency and why it is likely to remain so. The article was published in the midst of the last boom and sank like a stone. But now debate about the cause of the dollar’s hegemony has been revived in an interesting paper by Fields and Vernengo titled “Hegemonic currencies during the crisis: The dollar versus the euro in a Cartelist perspective” (also here). Their paper provides an opportunity to revive discussion, so I am posting the article again. Here it is (subject to a couple of word edits)

Thomas Palley
A Keynesian Theory of Hegemonic Currencies – Or Why the World Pays Dollar Tribute
Thomas I. Palley

See also, Ramanan, Kaldor’s Growth Plan, at The Case of Concerted Action

Bill Mitchell — What is “good” at the macro level may well be disastrous at the micro level

I have been reading about the Great Depression lately and comparing the sort of pressures that governments were placed under during that time to cut deficits which were rising on the back of a collapse in economic activity to what is going on today. There are many interesting parallels and déjà vu experiences. That research took me into some literature on the way the governments bow to industry demands as aggregate demand collapses. In turn, that led me to the way the military-industrial complex operates. Which took me into another literature on the role of the military-industrial complex in creating wars to provide markets for their goods – the merchants of death. And so it goes. That is the nature of research – it just takes one on a journey and usually to destinations previously not imagined. But this journey also clarifies some issues that readers regularly write to me about. The relationship between Modern Monetary Theory (MMT) as a macroeconomic framework and issues that issues that lie below the aggregate level – such as distributional issues. There are links clearly (for example, income distribution affects aggregate demand) but in other ways what is “good” at the macro level may well be downright disastrous at the micro level. But in dealing with the disaster at the micro level, we always have to be mindful of the way dealing with that disaster impacts on the aggregates. This is particularly important in considering issues relating to trade. The military-industrial complex is an excellent case study of these challenges. Here are some early thoughts.

Read it at Bill Mitchell | billy blog
What is “good” at the macro level may well be disastrous at the micro level

by Bill Mitchell

(h/t Clonal in the comments)

Ramanan — The Monetary Economics Of Sovereign Government Rating

Ramanan criticizes the MMT claim that imports are benefit in real terms and trade deficits don't matter as long as other countries desire to save in the importer's currency, because floating rates ensure market clearing and a currency sovereign is not constrained operationally in its own currency.

Read it at The Case of Concerted Action — Post Keynesian Ideas For A Crisis That Conventional Remedies Cannot Resolve
The Monetary Economics Of Sovereign Government Rating
by Ramanan

Ramanan has a comments section at The Case of Concerted Action, where I expect one can count on his responding to reasonable criticism. Comments welcome here, of course.

Wynne Godley on 7 unsustainable processes

WG: (1) the fall in private saving into ever deeper negative territory, (2) the rise in the flow of net lending to the private sector, (3) the rise in the growth rate of the real money stock, (4) the rise in asset prices at a rate that far exceeds the growth of profits (or of GDP), (5) the rise in the budget surplus, (6) the rise in the current account deficit, (7) the increase in the United States’s net foreign indebtedness relative to GDP.

Read it at The Case for Concerted Action
Seven Unsustainable Processes – Original
by Ramanan