It reads like a physicist paper.... well more like a good referee report... I notice.

If I would be the referee I would say that they key question on whether China policies coul dalone produce deflationary and recession drive in the US economy aer to swallow...

it looks more like a chaotic system... without the main Greenspan bubble, the fix peg and the huge China savings would have produced, at most deflation... but together with low interet reates produced a fire.

In physcis terms, China peg was a recission drive force which can not cross the nonlinear instability threshold... when you add the coupling with US policies, you have a fully instable system in phase space.

Having said that, I must say I do not how any can proof if I am wrong or not.. it is actually not science.. more like a pure narrative...

that's my probblem with economics... and why I find somehting weird... there is soemthing which I can nto pinpoint which leads me to believe that predictions without previos trial and error is almost impossible in econmics...

but interesting wenough, we all here agree that how the US decided to use the bubble free ride was a US decission.. using it for a consuming spending binge was really his decision, and probably the worst decision of all..

here in Spain we decided to do houses.. now we have a million free!!! one million flats which at least provide some cover inc ase of rain.. unfortunately we decided not to invest in science and technology (why , if you could make thousands of bucks with a real state pelotazo?).

A pleasure

I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude