Lavoie：Godley's the sectoral balances approach 2015（&Mitchell2019）

マーク・ラヴォアMarc Lavoie
Curriculum Reform & Rethinking Economics 2015https://t.co/5rb8j9Fr5b
10:02
Sectoral financial balances pic.twitter.com/kGsbvTEcRM

— luminous woman (@_luminous_woman) December 11, 2020

マーク・ラヴォア インタビュー

Curriculum Reform & Rethinking Economics

https://youtu.be/sPN1z1EQALo

10:02

https://twitter.com/_luminous_woman/status/1337242677109145602?s=21

^

https://twitter.com/_luminous_woman/status/1337232801637093379?s=21

L：

well the sectoral balanced approach starts from the national identities. 

and we just rearrange it in a way that well for instance we we look at what is the balance of the private sector. 

what is the financial balance of the government sector which is then the government surplus or government deficit. 

and what is the external balance so that's a good radio equipment once we put into the current account balance.

and we know that the sum of those three things has to be equal to zero. 

Ｑ:

but at any given time any one of those sectors can run a deficit or a surplus product a--they another sector is prepared to accommodate it. 

L：

exactly so if you make some predictions regarding the about the financial balance of the private sector. 

and you already know what's the situation of the order likely situation of the external sector.

then you have a good idea of what's going to be the deficit or the surplus of the government. 

and then if your if your predictions about these various things don't add up then it means one of your assumptions is wrong. 

（ Ｑ:

and I think it's a if we had looked at national economies more on that sort of a framework before 2008 we might have had been able to get to grips with the the problems that we subsequently experienced for for example countries like Spain and Ireland for example had very good good is probably problem were to use but they think they their public sector balance were roughly he's doing with their public levels of debt were small and so everyone who thought would have thought on the conventional notion that public property is bad that these are great countries their models before. but ）there was little sensitivity to the huge buildup in private sector debt which would have been picked up had there been more focused on this sectoral balanced approach. well.

L:

yes you you know I had many discussions about this.

 with Wynne Godley.

 so he was more optimistic than I was.

I must say on the usefulness of these balances.

 I mean it's highly useful as I said to identify whether or not.

you're making a very bad forecast with respect to one of the balances .

or one of the assumptions about economic growth and so on.

（Ｑ:

 his forecasting record would suppose remarkably could compared to most UK colobus maybe that was a cause for his optimism. yes people use my methodology you know．）

L：

Well and it has been used by companies like Goldman Sachs and it is now generalized I mean it's not something that when Godley himself invented because it's a national account identity. but he's certainly the the person who emphasized it most. and who induced other people to discover it and to use it. and as I said now in many financial offices they are using this to better understand what's going on. 

L：

セクター別のバランスの取れたアプローチは、国家のアイデンティティから始まります。

例えば、民間部門のバランスはどうなっているのか、政府部門の財政収支はどうなっているのか、そして政府の黒字か赤字か、というように。

政府部門の財政収支はどうなっているのか、これは政府の黒字、赤字です。

政府の財政収支は、政府の黒字か政府の赤字です。そして、対外収支は何ですか。

そして、この3つの合計がゼロになることがわかっています。

Ｑ:

しかし、いつでも、これらの部門のいずれかが赤字や黒字を出すことができますが、他の部門がそれに対応する準備をしている場合はどうなるのでしょうか？

L：

あなたが民間部門の財政収支についていくつかの予測を立てれば、まさにそうです。

民間部門の財政収支についていくつかの予測を立てれば

そうすると、あなたは、政府の赤字や黒字がどうなるかについて、良い考えを持っていることになります。

そして、これらの様々なことについての予測が合わない場合は、あなたの仮定の一つが間違っているということになります。

（ Ｑ:

例えば、スペインやアイルランドのような国は、非常に良い状態であったと思いますが、公共部門のバランスは大体良好であったと思いますが、公的債務のレベルは少なかったので、公共資産は悪いものであるという従来の考え方に基づいて、誰もが考えていたと思いますが、これらの国は偉大な国であるということを、以前のモデルでは考えていました。しかし、民間部門の債務の膨大な蓄積に対しては、ほとんど感度がありませんでした。

L:

そうですね......このことについては何度も議論しました。

  彼は私よりも楽観的でした

私はこの天秤の有用性について言わなければなりません。

つまり、私が言ったように、この天秤は非常に有用なのです。

天秤の一つに関して、非常に悪い予測をしているかどうかを見極めるのに非常に役立ちます。

または経済成長などの前提条件の一つに関して、非常に悪い予測をしているかどうかを特定するのに非常に役立ちます。

Ｑ:

  彼の予測の記録は、ほとんどの英国のコロブスと比較しても驚くほど優れていると思うのですが、それが彼の楽観主義の原因だったのでしょうか？人々は私の方法論をよく知っていますね）

L：

ゴールドマン・サックスのような企業で使われてきましたが 今では一般化しています つまり ゴッド・リー自身が考案したものではありません 国家口座のアイデンティティですから しかし 彼が最も強調した人物であり 他の人々にそれを発見させ 使うように誘導したのは間違いありません そして今 私が言ったように 多くの金融機関では 何が起こっているかをよりよく理解するために これを使っています。

部門別バランス分析：
┏━━━┓財出┏━━━┓輸入┏━━━┓
┃政府　┃Ｇ→┃民間　┃Ｍ→┃海外　┃
┃Ｔ－Ｇ┃←Ｔ┃Ｓ－Ｉ┃←Ｘ┃Ｍ－Ｘ┃
┗━━━┛　税┗━━━┛輸出┗━━━┛
　　　　　　　　Ｓ貯蓄、
　　　　　　　　Ｉ投資
（Ｔ－Ｇ）＋（Ｓ－Ｉ）＋（Ｍ－Ｘ）＝０

https://en.wikipedia.org/wiki/Modern_Monetary_Theory
https://upload.wikimedia.org/wikipedia/commons/5/50/Sectoral_balances_circuit_diagram.png

＿＿

ミッチェル2019

6.4Integrating NIPA, Stocks, Flows and the Flow of Funds Accounts 

The sectoral balances framework, which is derived from the national accounts framework, was explored in Section 6.2. It is intrinsically linked to the flow of funds analysis. They are different, but related, ways of considering national economic activity. An early exponent of the flow of funds approach, Lawrence Ritter (1963: 220) wrote that: 

The flow of funds is a system of social accounting in which (a) the economy is divided into a number of sectors and (b) a ‘sources-and-uses-of-funds statement’ is constructed for each sector. When all these sector sources-and-uses-of-funds statements are placed side by side, we obtain (c) the flow-of-funds matrix for the economy as a whole. 

Thus, the flow of funds accounts allow us to link a sector’s balance sheet (statements about stocks of financial and real net wealth) to income statements (statements about flows) in a consistent fashion. In a monetary economy, flows of expenditures measured in terms of the money of account spent over a period involve transactions between sectors in the economy, which also have logical stock counterparts; that is, flows feed stocks. The flow of funds accounts ensure that all of these transactions are correctly accounted for. This thinking underpinned the work of the so-called New Cambridge approach that was part of the Cambridge Economic Policy Group at the University of Cambridge in the early 1970s. Key members of this group were Martin Fetherston, Wynne Godley and Francis Cripps, all of whom were of a Keynesian persuasion.

 While the sectoral balances approach had been understood much earlier (for example, by Nicholas Kaldor and others), it was popularised by the New Cambridge macroeconomic analysis which put the concept of the net acquisition of financial assets (NAFA) into the forefront of its Keynesian income-expenditure model. Like Lawrence Ritter, the Cambridge economists were interested in tracing the flow of funds between the different sectors of the economy, which they divided into the government sector, the private domestic sector and the external sector. These transactions are recorded for a given period, and each sector could record a financial deficit or surplus. We can rewrite Equation (6.6) as follows: 

(6.7) (S - I) ≡ NAFA ≡ (G - T) + CAB

 (S – I) is the private domestic financial balance or NAFA of the private domestic sector. The private domestic sector is in financial surplus(deficit) when its disposable income (GNP – T) exceeds(is less than) its spending on consumption goods and investment goods. From a stock perspective, NAFA can also be measured by the difference between the private domestic sector’s stock of net financial assets at time t – 1 and the stock at time t, so if t is 2017, t – 1 would be 2016. If G – T < 0, then the government sector is spending less than it is taking out of the economy in taxation and undermining the capacity of the other two sectors to accumulate net financial assets by running surpluses and vice versa. CAB is the external sector financial balance (the current account balance) and comprises the trade balance (that is, the difference between export and import revenue on goods and services) and the net income flows that accrue to residents as a consequence of interest and dividends received on overseas ownership (offset by similar payments to foreigners). If the overall external sector balance is in deficit, then the national economy is issuing liabilities abroad or running down its net financial position in other ways, and foreigners are accumulating financial asset claims (and vice versa when the external balance is in surplus). Noting the stock/flow distinction, Equation (6.7) can be interpreted as meaning that if its right-hand side is positive, then (G – T) + CAB > 0, and the government sector fiscal balance plus the current account balance jointly generate national income and additional net financial assets for the private domestic sector. Then NAFA > 0, which means that the private domestic sector is running a surplus and acquiring new assets and/or reducing its existing debt obligations. Conversely, if the government sector fiscal balance plus the current account balance is negative, this would reduce national income and undermine the capacity of the private domestic sector to net save and add to its stock of net financial assets. In this case NAFA < 0, so that the private domestic sector is running down its net financial position by borrowing from the other sectors and/or by liquidating some of its stock of accumulated wealth. Equation (6.7) can also be written as:

 (6.8) [(S - I) - CAB] ≡ (G - T) 

where the term on the left-hand side [(S – I) – CAB] is the non-government sector financial balance and is of equal and opposite sign to the government financial balance, (G – T). 

This is the familiar MMT conclusion that a government sector deficit (surplus) is equal dollar for dollar to the non-government sector surplus (deficit). 

Importantly, transactions within the private domestic sector do not alter the net financial position of that sector overall. So, if a bank creates a loan for one of its customers then its assets rise but on the other side, the liabilities of the customer increase by an equal amount, leaving no change in the net position of the sector. The only way the private domestic sector can increase its net financial assets overall is through transactions with the government or external sector, for example, by acquiring a government bond or buying a foreign government bond (or a foreign corporate bond). These two points are key MMT insights. Once we understand the interlinked nature of the three sectors, then it is a simple step to realise that if one sector has improved its position by the net acquisition of financial assets, following a financial surplus, at least one other sector must have reduced its net financial assets or run a financial deficit. The flow of funds framework allows us to understand that the funds which a particular sector receives during a period (from current receipts, borrowing, selling financial assets, and running down cash balances) have to be equal to the total of its current expenditures, capital expenditures, debt repayments, lending, and accumulation of cash balances. This approach clearly allows us to trace the uses and sources of funds for each sector. It should be emphasised that the flow of funds approach is based on accounting principles rather than being a behavioural (theoretical) framework for understanding why these flows occur. Nor do we gain any insights as to the adjustment processes that govern the change in net financial assets in each sector. That caveat is not to be taken as a criticism of the approach; but merely an observation of its restrictions. It also doesn’t reduce the utility and insights that the approach provides. Often economists like to denigrate analyses that manipulate accounting identities as being too low brow. But any approach is valuable if it provides useful ways of thinking.