Economic theory at a glance

Michael Perelman michael at ecst.csuchico.edu
Wed Apr 18 19:00:15 PDT 2001


He did not quite say that. He described at how restrictive traditional theory is.

Seth Ackerman wrote:


> >From the Financial Markets Center's latest Fed research roundup:
> http://www.fmcenter.org/pdf/roundup01Q1web.pdf
>
> In a San Francisco Fed Economic Letter, UC Davis
> professor Paul Bergin approvingly cites "standard
> economic theories" suggesting "that any current
> account deficit that arises exclusively from the actions
> of private agents in this context must be optimal in the
> sense that it is improving the welfare of people in the
> economy." However, "if government action rather
> than purely private behavior is the underlying cause of
> the current account deficit, the argument stated
> previously for not worrying would no longer apply."

--

Michael Perelman Economics Department California State University Chico, CA 95929

Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu



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