a disturbing future of chronically weak demand and slow economic growth: secular stagnation global savings glut: global investment dearth Low real interest rates are evidence of such a glut: there were more savings searching for productive investments than there were productive investments to employ it. Another indication of the savings glut was the global imbalances. The glut of savings, then, has become a constraint on current demand. But since it is connected to weak investment, it also implies slow growth of prospective supply. This difficulty predates the crisis. But the crisis has made it even worse. The best response, then, is measures aimed at raising productive private and public investment. Yes, mistakes will be made. But it will be better to risk mistakes than accept the costs of an impoverished future.
Posted on: Mon, 02 Dec 2013 00:32:45 +0000
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