Randy and others on AFEEmail: Yes, the analysis in the New York Fed piece in which domestic savings decisions drive the foreign deficit appears to be completely incorrect and is of course the usual neoclassical analysis. The charts in the piece seem to show that the current account deficit is currently modest in relation to GDP and not rapidly increasing. Here is the key chart itself: Is the United States Relying on Foreign Investors to Fund Its Larger Budget Deficit? Based on Randy's helpful pointer, I checked out Foster's dissertation at this linkhttps://jfaggfoster.org/assets/dissertation.pdf After summarizing Keynes's critique of Say's Law, loanable funds, etc., Foster notes (p. 52) Keynes evidently considered his theory to be a complete [90] demonstration that the open market process cannot survive its inherent incapacity correctly to correlate the propensity to consume and the inducement to invest. Whilst, therefore, the enlargement of the functions of government, involved in the task of adjusting to one another the propensity to consume and the inducement to invest, would seem to a nineteenth-century publicist or to a contemporary American financier to be a terrific encroachment on individualism, I defend it, on the contrary, both as the only practicable means of avoiding the destruction of existing economic forms in their entirety and as the condition of the successful functioning of individual initiative. 169 Thus Keynes thought that his economic analysis could be used to achieve the minimum institutional adjustments required for avoiding complete collapse. Keynes’ theory is an analysis of the internal working of the open-market process. It pictures that process as defective in that it cannot maintain sufficient effective demand to maintain full employment. The concept of defectiveness is drawn from the conviction that continuity and efficiency of the economic process is the all-important basis for any sort of economic theorizing. In that conviction, *Keynes was able to say, in light of his theory, that, since the market process cannot alone maintain the requisites of its own continuance, deliberate measures must be taken to correct the deficiency. His theory also furnishes a quantitative measure of whatever governmental intrusions are adopted. But his theory offered [91] him no guide as to which enterprises or what kind of enterprise should be the points of intrusion, and he therefore refrained from making any pronouncements on that matter. A great many proposals for particular government enterprises have claimed basis in the Keynesian analysis. But their basis in that theory is restricted to the necessity for government expenditure; they can find in it no warrant for being selected as particular enterprises in which the government could or should engage. * This passage helps us to see Foster's position in relation to Keynes's theory of effective demand (and Kalecki's similar theory). He accepts it up to a point. Perhaps other devotees of these scholars will find it of interest. I am sure I will find more of interest in Foster's work. Greg Greg Hannsgen, Ph.D. Greg Hannsgen's Economics Blog[1] Research Associate, Levy Economics Institute of Bard College On Mon, Dec 3, 2018, at 4:37 PM, Wray, Randall wrote: > Hi Tim; I've got the breakdown of private sector balances, from Scott > Fullwiler:> > > > You might be referring to more recent data--this is only thru Q2. > > The NYFed piece Gregg sent is hilarious. I presume it is unintentional > comedy. The plain facts stare them in the face but they insist on > going with loanable funds.> > Note they have all the evidence and argument they need to draw the > conclusion that saving is merely a residual (indeed, all their > measures derive it from the residual) but still want to assign to it > causal priority.> > Can someone send them a bit of Fagg Foster? > > L. Randall Wray > Senior Scholar, Levy Economics Institute > Papers: www.levyinstitute.org/publications/?auth=287[2] > > Co-editor *Journal of Post Keynesian Economics* ISSN* *0160-3477 > (Print), 1557-7821 (Online) www.tandfonline.com/toc/mpke20/current> https://urldefense.proofpoint.com/v2/url?u=http-3A__www.tandfonline.com_toc_mpke20_current-5B3-5D&d=DwIFaQ&c=Cu5g146wZdoqVuKpTNsYHeFX_rg6kWhlkLF8Eft-wwo&r=LtbujWNPdbzw6j8eq9-RJVMBctp9ndCoqGEy57VsNLQ&m=TPut2Q2Dg9OIlmiqmFGyYDyBzbfzJKR1E5ELXER29aQ&s=Pj47Ovl82xca1pc_8rvQIs0juEAacoP2uW1dWD51rl0&e= > > New Book: *Why Minsky Matters: An Introduction to the work of a > maverick economist, *Princeton University Press > https://urldefense.proofpoint.com/v2/url?u=http-3A__press.princeton.edu_titles_10575.html-5B4-5D&d=DwIFaQ&c=Cu5g146wZdoqVuKpTNsYHeFX_rg6kWhlkLF8Eft-wwo&r=LtbujWNPdbzw6j8eq9-RJVMBctp9ndCoqGEy57VsNLQ&m=TPut2Q2Dg9OIlmiqmFGyYDyBzbfzJKR1E5ELXER29aQ&s=6JiiE5OLj4m38RjhoNzlAZ5YKC7M_T3LaHfg0Idmc9A&e=> > New Book: *Modern Money Theory: a primer on macroeconomics for > sovereign monetary systems*, Palgrave Macmillan > https://urldefense.proofpoint.com/v2/url?u=http-3A__www.palgrave.com_page_detail_modern-2Dmoney-2Dtheory-2Dl-2Drandall-2Dwray_-3Fisb-3D9781137539908-5B5-5D&d=DwIFaQ&c=Cu5g146wZdoqVuKpTNsYHeFX_rg6kWhlkLF8Eft-wwo&r=LtbujWNPdbzw6j8eq9-RJVMBctp9ndCoqGEy57VsNLQ&m=TPut2Q2Dg9OIlmiqmFGyYDyBzbfzJKR1E5ELXER29aQ&s=LKw8rdwV0lJrNalMFzaOqdACR2Z6L0Am8h9hR1S9REo&e=> > Please make note of my new email address as I will be transitioning > all email to:> [log in to unmask] > > > > *From:* AFEEMAIL Discussion List <[log in to unmask]> on behalf > of Greg Hannsgen <[log in to unmask]> *Sent:* Monday, December 3, 2018 > 3:50 PM *To:* [log in to unmask] *Subject:* Re: [AFEEMAIL] > Sectoral balance> > Hi Tim, > Did you see this piece from the New York Fed? It does contain > balance series:> https://urldefense.proofpoint.com/v2/url?u=https-3A__libertystreeteconomics.newyorkfed.org_2018_11_is-2Dthe-2Dunited-2Dstates-2Drelying-2Don-2Dforeign-2Dinvestors-2Dto-2Dfund-2Dits-2Dlarger-2Dbudget-2Ddeficit.html-5B6-5D&d=DwIFaQ&c=Cu5g146wZdoqVuKpTNsYHeFX_rg6kWhlkLF8Eft-wwo&r=LtbujWNPdbzw6j8eq9-RJVMBctp9ndCoqGEy57VsNLQ&m=TPut2Q2Dg9OIlmiqmFGyYDyBzbfzJKR1E5ELXER29aQ&s=zEtpD_NM49Wi2spstpl0Xk2ucI-rVp_kgXmM4BhsNTc&e=> Greg > > Greg Hannsgen, Ph.D. > Greg Hannsgen's Economics Blog > Research Associate, Levy Economics Institute of Bard College > > economics website: https://urldefense.proofpoint.com/v2/url?u=https-3A__greghannsgen.org-5B7-5D&d=DwIFaQ&c=Cu5g146wZdoqVuKpTNsYHeFX_rg6kWhlkLF8Eft-wwo&r=LtbujWNPdbzw6j8eq9-RJVMBctp9ndCoqGEy57VsNLQ&m=TPut2Q2Dg9OIlmiqmFGyYDyBzbfzJKR1E5ELXER29aQ&s=X93Y7jd5F4Z6s0t-XvSKoqfR-6Q31yQ2mbR2smUcqnc&e= > Page with information about me and my work, including where my working > papers can be found:> https://urldefense.proofpoint.com/v2/url?u=https-3A__greghannsgen.org_greg-2Dhannsgens-2Deconomics-2Dblog_-5B8-5D&d=DwIFaQ&c=Cu5g146wZdoqVuKpTNsYHeFX_rg6kWhlkLF8Eft-wwo&r=LtbujWNPdbzw6j8eq9-RJVMBctp9ndCoqGEy57VsNLQ&m=TPut2Q2Dg9OIlmiqmFGyYDyBzbfzJKR1E5ELXER29aQ&s=6bJQWwhkFUb-3eOpPbQTHIiejxlqVmVl7suipN_XO7k&e= > > You may also by interested in this noneconomics project of mine: > https://urldefense.proofpoint.com/v2/url?u=https-3A__healthyveganhudsonvalley.com-5B9-5D&d=DwIFaQ&c=Cu5g146wZdoqVuKpTNsYHeFX_rg6kWhlkLF8Eft-wwo&r=LtbujWNPdbzw6j8eq9-RJVMBctp9ndCoqGEy57VsNLQ&m=TPut2Q2Dg9OIlmiqmFGyYDyBzbfzJKR1E5ELXER29aQ&s=eI4TD5PIA19IAV701e8RwenmL6BklsEydWDkdZLDG1o&e=> > > > On Tue, Nov 20, 2018, at 5:48 AM, Wunder, Tim wrote: >> Anyone on here seen a sectoral balance lately? Household savings is >> declining yet gov deficits are increasing. Not sure what trade >> balances are doing or how business savings is going. I am just >> curious where the money is going and was hoping someone had done the >> balance to save me the trouble of looking it up.>> >> >> >> Timothy A Wunder >> Clinical Associate Professor of Economics >> Graduate Advisor >> Department of Economics >> 817-272-3257 > Links: 1. https://urldefense.proofpoint.com/v2/url?u=http-3A__www.greghannsgen.org&d=DwIFaQ&c=Cu5g146wZdoqVuKpTNsYHeFX_rg6kWhlkLF8Eft-wwo&r=LtbujWNPdbzw6j8eq9-RJVMBctp9ndCoqGEy57VsNLQ&m=TPut2Q2Dg9OIlmiqmFGyYDyBzbfzJKR1E5ELXER29aQ&s=YchZStUBCh2bvrXocC7-cbFz7vSI4gdM96xcSwU1Bg8&e= 2. https://urldefense.proofpoint.com/v2/url?u=http-3A__www.levyinstitute.org_publications_-3Fauth-3D287&d=DwMFAw&c=Cu5g146wZdoqVuKpTNsYHeFX_rg6kWhlkLF8Eft-wwo&r=LtbujWNPdbzw6j8eq9-RJVMBctp9ndCoqGEy57VsNLQ&m=jP24s4wbPv4JcsCLepH0urLMa2il8BreSNVTNyiD4Fg&s=iYkJfh9UwePsTxoHmFieYpiVuBGy_20jTHjg4DF2a_s&e= 3. https://urldefense.proofpoint.com/v2/url?u=http-3A__www.tandfonline.com_toc_mpke20_current&d=DwMFAw&c=Cu5g146wZdoqVuKpTNsYHeFX_rg6kWhlkLF8Eft-wwo&r=LtbujWNPdbzw6j8eq9-RJVMBctp9ndCoqGEy57VsNLQ&m=jP24s4wbPv4JcsCLepH0urLMa2il8BreSNVTNyiD4Fg&s=p0g8_LVnR5W2YdungZ3qhU6rQvcnnuFVjPobUk62m5g&e= 4. https://urldefense.proofpoint.com/v2/url?u=http-3A__press.princeton.edu_titles_10575.html&d=DwMFAw&c=Cu5g146wZdoqVuKpTNsYHeFX_rg6kWhlkLF8Eft-wwo&r=LtbujWNPdbzw6j8eq9-RJVMBctp9ndCoqGEy57VsNLQ&m=jP24s4wbPv4JcsCLepH0urLMa2il8BreSNVTNyiD4Fg&s=zb6trEf0whKFwyo4KS0FHi0Zf2YgCf3WLiOgjL7CIu4&e= 5. https://urldefense.proofpoint.com/v2/url?u=http-3A__www.palgrave.com_page_detail_modern-2Dmoney-2Dtheory-2Dl-2Drandall-2Dwray_-3Fisb-3D9781137539908&d=DwMFAw&c=Cu5g146wZdoqVuKpTNsYHeFX_rg6kWhlkLF8Eft-wwo&r=LtbujWNPdbzw6j8eq9-RJVMBctp9ndCoqGEy57VsNLQ&m=jP24s4wbPv4JcsCLepH0urLMa2il8BreSNVTNyiD4Fg&s=J3qDpBb1b2PjkgyUu5tOMuDAjM18dvf0lwTxxmLoKz0&e= 6. https://urldefense.proofpoint.com/v2/url?u=https-3A__libertystreeteconomics.newyorkfed.org_2018_11_is-2Dthe-2Dunited-2Dstates-2Drelying-2Don-2Dforeign-2Dinvestors-2Dto-2Dfund-2Dits-2Dlarger-2Dbudget-2Ddeficit.html&d=DwMFaQ&c=Cu5g146wZdoqVuKpTNsYHeFX_rg6kWhlkLF8Eft-wwo&r=LtbujWNPdbzw6j8eq9-RJVMBctp9ndCoqGEy57VsNLQ&m=mUT7_AjWAVpQsSriQmjVMZfz9zp6CsUFJB0mqi2mfRc&s=UIkhvd85LQcM96S9r4TqGYJAZB4MyPOVVE6QDIl_smk&e= 7. https://urldefense.proofpoint.com/v2/url?u=https-3A__greghannsgen.org&d=DwMFaQ&c=Cu5g146wZdoqVuKpTNsYHeFX_rg6kWhlkLF8Eft-wwo&r=LtbujWNPdbzw6j8eq9-RJVMBctp9ndCoqGEy57VsNLQ&m=mUT7_AjWAVpQsSriQmjVMZfz9zp6CsUFJB0mqi2mfRc&s=CKd-U6FLOPCGpQ-jL6YjRsKVlzH0ihhtorA4iCkE-Ng&e= 8. https://urldefense.proofpoint.com/v2/url?u=https-3A__greghannsgen.org_greg-2Dhannsgens-2Deconomics-2Dblog_&d=DwMFaQ&c=Cu5g146wZdoqVuKpTNsYHeFX_rg6kWhlkLF8Eft-wwo&r=LtbujWNPdbzw6j8eq9-RJVMBctp9ndCoqGEy57VsNLQ&m=mUT7_AjWAVpQsSriQmjVMZfz9zp6CsUFJB0mqi2mfRc&s=2YyUFqRXOh7XENBpWjeq06h09F_pbgGXLYrN8q8eJ3I&e= 9. https://urldefense.proofpoint.com/v2/url?u=https-3A__healthyveganhudsonvalley.com&d=DwMFaQ&c=Cu5g146wZdoqVuKpTNsYHeFX_rg6kWhlkLF8Eft-wwo&r=LtbujWNPdbzw6j8eq9-RJVMBctp9ndCoqGEy57VsNLQ&m=mUT7_AjWAVpQsSriQmjVMZfz9zp6CsUFJB0mqi2mfRc&s=qdAw3M6z-0fw6aqs5RkXnbp42r0cx5R-Ad-RC5Macbw&e=