Conventional exchange rate models are based on the fundamental hypothesis that, in the long run, real exchange rates will move in such a way as to make countries equally competitive. Thus they assume that, in the long run, trade between countries will be roughly balanced. The difficulty in...

As we projected in a previous strategic analysis, the U.S. economy experienced growth rates higher than 4 percent in 2004. The question we want to raise in this strategic analysis is whether these rates will persist or come back down. We believe that several signs point in the latter direction....

Conventional theory makes the curious assumption that, in international trade, movements in the real exchange rate negate cost differences so as to make all countries equally competitive. But quite the contrary, it is absolute cost advantages that determine competition between countries, just as...

This paper demonstrates that the terms of trade are determined by the equalization of profit rates across international regulating capitals, for socially determined national real wages. This provides a classical/Marxian basis for the explanation of real exchange rates, based on the same...

This paper derives measures of potential output and capacity utilization for a number of OECD countries, using a method based on the cointegration relation between output and the capital stock. The intuitive idea is that economic capacity (potential output) is the aspect of output that co-varies...

Conventional exchange rate models are based on the fundamental hypothesis that, in the long run, real exchange rates will move in such a way as to make countries equally competitive. Thus they assume that, in the long run, trade between countries will be roughly balanced. The difficulty in...

Conventional exchange rate models are based on the fundamental hypothesis that, in the long run, real exchange rates will move in such a way as to make countries equally competitive. Thus they assume that in the long run, trade between countries will be roughly balanced. The difficulty in...

Recent total government budget deficits, now running at about 3.4 percent of gross domestic product (GDP), have managed to partially rescue the U.S. economy from the full consequences of its long, debt-driven boom. But if we are to avoid a steep recession, much more will be needed