I always thought the center of the universe was the corner of Broadway and
Houston, in Manhattan. I was wrong. If you’re an economist, at least, the center
of the universe would seem to have been found at the corner
of College and Bancroft, in Berkeley, at noon Pacific Time today.
On the one hand, one aspires to being a part of lunchtime conversations such
one; on the other hand, one would be so intimidated that one would probably
be far too scared to even open one’s mouth. Maybe there are reasons to study
economics after all.
"So if Britain with its structural trade surpluses could run up net
foreign assets equal to twenty months’ GDP by 1913, could the U.S. run up
a net foreign liability balance equal to twenty months’ GDP by 2023?"
"By symmetry, that would mean that the rest of the world would have to
play the role of pre-World War I Britain. Yes, it could happen."
"And somebody would have to play the role of pre-World War I Argentina.
Would that be the U.S?"
"Usually in international finance the role of Argentina is played by