Yes, I agree.
>But for these questions, it seems to me that a
>standard (orthodox) >analysis is appropriate.
How?
>The US is currently
>stimulating the rest of the world's aggregate >demand, via its
>current-account deficit.
Why the "US is currently stimulating the rest of the world's aggregate demand, via its current-account deficit."? How much does this contribute to the profitability in the US based businesses? Why Europe and Japan are not able to show growth similar to the US or run large current account deficits?
> 1. an increase in the demand for US exports and a fall in US imports,
>encouraging the current boom(let?) to persist.
>
> 2. a fall in the demand for rest-of-the-world exports and a rise in ROW
>imports, except for in China and other countries which are keeping their
>currencies from rising relative to the US$. This encourages recession or
>slower demand growth in these countries.
> to a large extent, on a global level, #1 and #2 cancel out, since it's
>simply a matter of >switching demand from the ROW to the US.
That may be the case in terms of demand, but what does it imply in terms rate of profit on the total capital employed in the US or globally (If we see extended reproduction as a global process)? (Surely it's profitability rather than demand that matters most to capitalism.)
Ulhas