I’m teaching using Mankiw’s Macroeconomics 8th edition and on page 138, Chapter 6, he uses an example to illustrate and develop intuition of what is always a problem for students, that capital flows have to equal current account (NX = S – I). The trouble is, in his example Mankiw writes as if an exporter who obtains currency represents one capital outflow and then when she trades yen currency for yen stocks or bonds is another capital outflow. But that is just transforming the financial asset… the outflow happened already with the obtaining of currency. Students might be terribly confused.
Blogs I Follow
- Pamela Roberts et Ezechiel Lopemba de SIL en visite à FAVL-BF
- Someday you might like this song by Jason Molina, Farewell Transmission, but don’t go down his dark path no no
- Why did the South support the Federal income tax and the 16th amendment? because they understood the Progressive movement all too well
- Who I Am & Why I Am Where I Am by Kaitlyn Aurelia Smith
- Kathryn Schulz in The New Yorker, on WIlliam Kelley, a fantastic short essay
- An error has occurred; the feed is probably down. Try again later.