U.S. foreign debt

[Brad De Long]

>Brad noted:
>
> > NICing East Asia is pretty open to U.S. exports; Europe likewise;
> > Japan isn't. But I'm not sure if the cutoff would be more damaging or
> > if it would just make the dollar fall further, which would be bad for
> > the standards of living of those of us who consume a lot of imports,
> > would generate some inflation, but would be not at all bad for the
> > rest of us...
>
>Just not that sanguine about a compensatory pick up in exports due
>to dollar devaluation however open other countries remain--there was that
>analysis by Andrew Warner, cited by James Galbraith, that growth in
>exports is more conditioned by investment activity abroad than the value
>of the dollar

True... and worrisome...

-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
"Now 'in the long run' this [way of summarizing the quantity theory 
of money] is probably true.... But this long run is a misleading 
guide to current affairs. **In the long run** we are all dead. 
Economists set themselves too easy, too useless a task if in 
tempestuous seasons they can only tell us that when the storm is long 
past the ocean is flat again."

  
--J.M. Keynes
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
J. Bradford De Long; Professor of Economics, U.C. Berkeley;
Co-Editor, Journal of Economic Perspectives.
Dept. of Economics, U.C. Berkeley, #3880
Berkeley, CA 94720-3880
(510) 643-4027; (925) 283-2709 phones
(510) 642-6615; (925) 283-3897 faxes
http://econ161.berkeley.edu/
<delong at econ.berkeley.edu>