Aco: Have to admit, I suck at macro. But I don't see why Stiglitz was wrong. Isn't Boudreaux second explanation -- ie., the Saudis could just buy GE equities and therefore not increase indebtedness -- implies a net asset transfer, which can be interpreted as an increase in indebtedness?
Arya, I think Boudreaux's point is more on Stiglitz's assertion that trade deficit forces American to borrow more. He said it in his response to comments.Thanks!
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