Savings gluts and interest rates
Subtitle: the missing link to Europe
By: Michael P. Dooley, David Folkerts-Landau, Peter M. Garber.
Contributors: Folkerts-Landau, D. F. I. 1949-; National Bureau of Economic Research.
Series: NBER working paper series ;; working paper 11520; Working paper series (National Bureau of Economic Research : Online) ;; working paper no. 11520.
Publisher: National Bureau of Economic Research
Published: 2005
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Subjects: Saving and investment -- United States; Saving and investment -- Europe; Saving and investment -- Developing countries; Interest rates -- United States; Interest rates -- Europe; Interest rates -- Developing countries
Description: "Data for world savings rates do not suggest that an aggregate glut of world savings has depressed US and international interest rates in recent years.  Unusual but offsetting changes in savings rates have been limited to three regions: sharp declines in the US have been matched by sharp increases for developing Asia and the Middle East.  The world saving rate has increased very little.  There are two important features of this change in regional savings behavior.  First, three-quarters of the increase in Asian and Middle Eastern savings has been placed in international reserves.  Second, all these additional savings have been absorbed by the United States.  Even if reserves are mostly placed initially in the US, we would not expect all the savings exported from these high savings regions to remain in the United States.  A collapse of expected profits outside the US seems to us a compelling explanation for the US current account deficit and depressed international interest rates"--National Bureau of Economic Research web site.
Notes: Includes bibliographical references.
Title from PDF file as viewed on 8/8/2005.
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