Around 6 months ago, I thought and studied the desirable amount of Japanese Government Bonds. It is turned out that I confused annual figures and accumulated ones. Basically, equilibriums use annual figures, while the points of argument are accumulated ones.
The accumulated amount of 685 trillion Yen of JGB seems too huge in comparison with 83 trillion Yen of annual government expenditure. But the amount of accumulated financial assets in individual sector is around 1,545 trillion Yen in Japan, which is one-third of USA's.
I hope invisible hand is still valid in this so political sector.
My consideration materials are as follows :
Balance of payments equilibrium : X - M + Ki - Ko = 0
National income equilibrium : Y = C + I + G + ( X - M ) , Y = S + C , S = I
Σ S = Σ JP + Σ OS ( 1545 = 685 + 860 )
Σ K = Σ Ko - Σ Ki ( 186 = 434 - 248 )
where:
X = exports, M = imports, Ki = capital inflows, Ko = capital outflows, Y = national income, C = Consumption, I = investment, G = government expenditure, S= savings, JP = Japanese government bonds, PI = private investment
The accumulated amount of 685 trillion Yen of JGB seems too huge in comparison with 83 trillion Yen of annual government expenditure. But the amount of accumulated financial assets in individual sector is around 1,545 trillion Yen in Japan, which is one-third of USA's.
I hope invisible hand is still valid in this so political sector.
My consideration materials are as follows :
Balance of payments equilibrium : X - M + Ki - Ko = 0
National income equilibrium : Y = C + I + G + ( X - M ) , Y = S + C , S = I
Σ S = Σ JP + Σ OS ( 1545 = 685 + 860 )
Σ K = Σ Ko - Σ Ki ( 186 = 434 - 248 )
where:
X = exports, M = imports, Ki = capital inflows, Ko = capital outflows, Y = national income, C = Consumption, I = investment, G = government expenditure, S= savings, JP = Japanese government bonds, PI = private investment
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