tag:blogger.com,1999:blog-1513588060557517621.post3832825252103509584..comments2023-03-22T12:40:49.113+01:00Comments on Notes on the Next Bust: A Current Account Surplus is Obviously a Good Thing. Isn't it?Ari Andricopouloshttp://www.blogger.com/profile/00181838814176635218noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-1513588060557517621.post-75875866845086006082016-04-05T14:23:18.938+02:002016-04-05T14:23:18.938+02:00My mind was in the Eurozone when writing the artic...My mind was in the Eurozone when writing the article; in a currency union the situation is very different and CA deficits are to be avoided at all costs.<br /><br />Overall though I am inclined to agree with you that it is not a big deal running a deficit as long as a) you have sovereign currency and b) the government borrows in that currency to fund the loss in demand. A problem arises if private sector debt fills this demand gap.<br /><br />In this case, a period of higher consumption now may be followed by a period of lower consumption later (if and when the deficit reverses) but the free floating currency prevents any particularly bad outcome.<br /><br />Really it was lazy writing on my part, as I was more concerned with the surplus than the deficit and didn't think beyond the Eurozone.<br /><br />Anyway, I look forward to your piece on the UK. Ari Andricopouloshttps://www.blogger.com/profile/00181838814176635218noreply@blogger.comtag:blogger.com,1999:blog-1513588060557517621.post-67014887674125527932016-04-05T14:03:03.983+02:002016-04-05T14:03:03.983+02:00I don't agree that a current account deficit i...I don't agree that a current account deficit is "clearly" a bad thing. In fact your "aside" at the end gave the lie to this statement. Under some circumstances, a current account deficit is a strong statement of external confidence in the economy and in the currency. For example, the US's current account deficit is a necessary consequence of the fact that its currency is the worldwide settlement currency and its government debt is the premier risk-free asset. Have you heard of Triffin's Dilemma? Frances Coppolahttps://www.blogger.com/profile/09399390283774592713noreply@blogger.comtag:blogger.com,1999:blog-1513588060557517621.post-90169534402057676602016-04-04T16:11:55.271+02:002016-04-04T16:11:55.271+02:00Thanks Jerome!Thanks Jerome!Ari Andricopouloshttps://www.blogger.com/profile/00181838814176635218noreply@blogger.comtag:blogger.com,1999:blog-1513588060557517621.post-27738685146642372172016-04-04T16:04:31.308+02:002016-04-04T16:04:31.308+02:00Thank you! I hope to get better as I read more fro...Thank you! I hope to get better as I read more from people like you.readjeromehttp://ceditalk.comnoreply@blogger.comtag:blogger.com,1999:blog-1513588060557517621.post-17797126564935879162016-04-04T15:52:04.302+02:002016-04-04T15:52:04.302+02:00Nice post. It is true that Ghana's investment ...Nice post. It is true that Ghana's investment needs may mean it is better to run a deficit - although hopefully the investment is in the form of equity rather than debt ( in case things go wrong). <br /><br />I have voted for you for Ghana's best blog by the way. It is definitely the best blog I have read from Ghana.Ari Andricopouloshttps://www.blogger.com/profile/00181838814176635218noreply@blogger.comtag:blogger.com,1999:blog-1513588060557517621.post-11133779758221889602016-04-04T15:40:14.981+02:002016-04-04T15:40:14.981+02:00I quite recently published a piece about Ghana'...I quite recently published a piece about Ghana's trade deficit (link http://ceditalk.com/2016/04/04/is-ghanas-trade-deficit-a-bad-thing/) so I'm happy to see you take on the current account. It appears to me that the claims Germany has on the rest of the world due to its current account surplus would not be worth risking the stability of the eurozone for. I don't think that is a trade they really want to make. readjeromehttp://ceditalk.comnoreply@blogger.com