The purpose of this paper is to lay out a logical approach for understanding the flow of funds system and its role in the financial crisis of 2008. It presents the flow of funds system without bogging down into the Fed's flow of funds accounting reports. Once the flow of funds is understood, we...

This paper sets out to investigate the forces behind the so-called "global capital flows paradox" and related "dollar glut" observed in the era of advancing financial globalization. The supposed paradox is that the developing world has increasingly come to pursue policies that result in current...