Monday, October 19, 2009

A different way of discussing global imbalances

My favorite paragraph so far this morning comes from A different way of discussing global imbalances by Tyler Cowan:

The two prices contradict each other and they continue to do so because explicit arbitrage is not possible.  (Ideally, at least in neoclassical fantasy land, the U.S. government should be borrowing money from the Chinese and selling them back insurance at a higher price.)


I think I'll start abbreviating "neoclassical fantasy land" as "NFL".

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