Economic theory at a glance

Daniel Davies d_squared_2002 at yahoo.co.uk
Wed Apr 18 23:34:29 PDT 2001


--- Seth Ackerman <SAckerman at FAIR.org> 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."
>

Woohooo!!!! The Lawson Doctrine! I've always thought that Greenspan would go down in history as America's Nigel Lawson, and was wondering when someone was going to describe the US current a/c deficit as "benign and self-correcting"

http://www.google.com/search?q=cache:www.utdt.edu/~fsturzen/current%2520_account2.pdf+lawson+doctrine+benign+self-correcting&hl=en

dd

===== ... in countries which do not enjoy Mediterranean sunshine idleness is more difficult, and a great public propaganda will be required to inaugurate it. -- Bertrand Russell

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