Friday, December 26, 2008

Dollar shift: While Americans spent, Chinese saved

" ..... but Americans did not use the lower-cost money afforded by Chinese investment to build a 21st-century equivalent of the railroads".

Another primer on Econ 101 for all IB Economics 2009 candidates. It brings together most of what we've learned throughout these (almost) 2 years.

Read it here.

PS: Free Exchange, also makes a reference (today, the 26th) to the article. It considers it a finger pointing argument:
EVERYONE is a victim; everyone is to blame. "The reckoning" continues as the New York Times singles out another scapegoat for the financial crisis. China gets added to the running list of actors without whom this economic snafu would not have been possible, joining the ranks of Wall Street executives, mortgage brokers, credit-rating agencies, homeowners, the White House, Senator Charles Schumer, former Senator Phil Gramm, the rest of Congress, and possibly you.
Read the comment by Yves Smith (his full post is here)for the 'other side'. If you feel a bit uneasy (you shouldn't by now after our class discussions) on how there are such different viewpoints, read this one by Greg Mankiw ('A Question about Learning Economics' a letter to Greg M. by a confused Econ major and Greg's answer)

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