A PS and an Opps. I Just Sent an Article that Left out a Chart. The Corrected Version is at:

https://larrykotlikoff.substack.com/p/the-us-capital-glut-and-other-myths

Sorry to clutter your inbox. But I left out figure 8 in the email that I just sent, which features a joint article with Berekely economist, Alan Auerbach, entitled The US Capital Glut and Other Myths.

The article is corrected at larrykotlikoff.substack.com. It’s also available as a more readable PDF at https://kotlikoff.net/wp-content/uploads/2023/08/The-US-Capital-Glut-and-Other-Myths-8-31-23.pdf.

I urge you to take a look at this article. Maybe we are missing something, but it seems to thoroughly undermine two major popular macroeconomic opinions. The first is former Federal Reserve Chairman, Ben Bernanke’s proposition that the world is experiencing a capital glut. The second is former Treasury Secretary, Lawrence Summers’ view that we’re suffering from Secular Stagnation. These views have led to a connected contention offered by former Chief Economist of the IMF that deficits may be free. (Re Blanchard’s view, I recommend, for technical readers, these two articles: https://kotlikoff.net/wp-content/uploads/2023/05/When-Interest-Rates-Go-Low-Should-Public-Debt-Go-High-April-2023.pdf and https://kotlikoff.net/wp-content/uploads/2023/08/AreDeficitsFree.pdf. The former was published in the Journal of Public Economics. The later is forthcoming in AEJ:Macro.)

Again, apologies for this blooper!

best, Larry