The Pettis post under discussion in this subthread is straight-forward analysis according to standard textbook models of international trade. Everything he says is right out of an intro undergraduate course on the subject.<p>I don’t understand why you find it confusing. Perhaps you could elaborate a bit? (Admittedly, this stuff is clearer when spelled out over 100 pages of a textbook with a bunch of examples, clear formulae, and discussion of competing theories, vs. condensed into a blog post.)<p>Wilson and Riley’s argument is pretty hand-wavey, full of entirely unsupported assertions. (Which is fair for a very short blog post, I suppose, but isn’t very convincing.) I’m not sure what they have to do with “Modern Money Theory”, which from what I gather in a quick web search disagrees sharply with their analysis.