The sum of the current account deficits of all the countries in the world should be equal to zero: One country's deficit should show up as a surplus for the other countries taken as a whole. This is not, however, the case in the data: If we just add the published current account deficits of all the countries in the world, it would appear that the world is running a [measured] large current account deficit. Some economists speculate that the explanation is unrecorded trade with the Martians. Most others believe that mismeasurement is the explanation.
Quote of the day courtesy of Olivier Blanchard, author of Macroeconomics (International Edition).
(emphasis mine... shouldn't it be Interplanetary Edition instead?)
1 comment:
Aie... so that particular quote got you too, eh? I still remember that from last sem. Olivier Blanchard is quite clear in his explanations, and a little witty, too.
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