Yanis Varousfakis talks of different aspects of it in his nook 'The Global Minotaur'. One aspect from a recent article in The Guardian "In his recent book The Global Minotaur, Varoufakis claims that the notion of a surplus recycling mechanism is simple in theory and revolutionary in its implications. It was first devised by Keynes while working as an unpaid policy adviser to the British Treasury during the early 1940s. The proposal was an outgrowth of Keynes’s frustration with the limits of the gold standard during the 1920s. At that time there was an outflow of gold from Britain to the US to pay for Britain’s trade deficit. Logically the inflow of gold should have expanded the money supply in the US, increasing the competitiveness of UK exports. But the US adopted policies to offset inflationary pressures. As the economist Marie Christine Duggan has suggested, the harsh lesson for Keynes was that the gold standard was ineffective at forcing creditor nations to increase domestic prices or reinvest their surpluses. Creditor nations were free to hoard as they liked, placing the burden of action on debtor nations who had very little choice but to act in ways that tended to depress their domestic economies.Keynes’s proposal for curbing the problem was to create global rules that would place equal pressure on both creditor and debtor nations to adjust their respective trade imbalances, helping to ease the burden shouldered by debtor nations."
From a post of Michael Pettis, surpluses may not be good even for creditor countries:
" Far more interesting to me is the impact of the indemnity on Germany. From 1871 to 1873 huge amounts of capital flowed from France to Germany. .... As money poured into Germany the German economy boomed, along with German consumption, investment (a growing share of which went into projects at home and abroad that turned out in retrospect to be overly optimistic), and into the Berlin and Viennese stock markets. By early 1873 more experienced German, Austrian and British bankers were quietly warning each other of a speculative mania, and they were right. The stock market frenzy culminated in the 1873 global stock market crisis, which began in Vienna in May, shortly after the beginning of the 1873 World Fair,... "
From a post of Michael Pettis, surpluses may not be good even for creditor countries:
" Far more interesting to me is the impact of the indemnity on Germany. From 1871 to 1873 huge amounts of capital flowed from France to Germany. .... As money poured into Germany the German economy boomed, along with German consumption, investment (a growing share of which went into projects at home and abroad that turned out in retrospect to be overly optimistic), and into the Berlin and Viennese stock markets. By early 1873 more experienced German, Austrian and British bankers were quietly warning each other of a speculative mania, and they were right. The stock market frenzy culminated in the 1873 global stock market crisis, which began in Vienna in May, shortly after the beginning of the 1873 World Fair,... "
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