costs at present. many observers are raising the possibility of a “ new normal ” for the global economy, in which moderate global demand, low productivity growth, and slow trade may persist for some time, keeping interest rates in the advanced economies “ low for long. ” to be sure, bond yields have moved up recently, but they remain quite low by historical standards. accordingly, the cost of external finance to asian economies has fallen, which should support strong private capital flows to emerging markets. normally, we would see setster ( 2016 ) for a detailed discussion of the return of the east asian savings glut. worry about volatility of these flows and how they might exacerbate risks of financial instability, particularly as u. s. monetary policy normalizes. but we should also bear in mind that many emerging market economies ( emes ), particularly in asia, have improved their macroeconomic fundamentals over the past two decades ; that they have built an adequate war chest of reserves, with no pending need to further reserve accumulation for precautionary purposes ; and that their currencies are much more flexible, which acts as an adjustment mechanism to shocks and also lessens the possibility of fluctuations in reserves due to currency intervention. these factors have made the emerging asian economies much less vulnerable. given all this, dare we imagine a world in which private capital inflows to emes could prove self - sustaining, are not offset by reverse flows of official capital, and would finance longterm profitable investment that would help support growth in these economies while also supporting global growth? in essence, these capital inflows would finance the shift from exportled growth to domestic - led growth required by the slowdown in global trade. and, with little or no official outflows, emes would have total capital net inflows as well, consistent with running current account deficits instead of current account surpluses. as pointed out recently by former fed chairman ben bernanke, the availability of profitable capital investments in one part of the world can help defeat secular stagnation in another part. 18 of course, these developments may take time. the point is that at this current juncture of the global economy, it is all the more important for emerging asian economies — and, indeed, emerging market economies more broadly — to enhance domestic demand while pursuing see bernanke ( 2015 ). prudent policies. it would be good to do this for the sake of the global economy

have risen sufficiently to move a noticeable number of underwater households – that is, those who owe more on their mortgages than the market value of their homes – from negative equity to positive equity. however, housing markets differ greatly both across regions and within metropolitan areas, and the positive signs in the aggregate data do not apply to all neighborhoods equally. for example, even within those metropolitan areas that have experienced rising average prices in the two years after the end of the most recent recession ( q2 : 2009 ), existing home sales rose only 4 percent, house prices fell by 4 percent, according to the corelogic price index, and residential investment averaged only 2 – 1 / 2 percent of gross domestic product ( gdp ) – half of the average gdp between 1949 and 2006. a summary of long - term vacant typologies, background on analysis, and data by metropolitan statistical area ( msa ) is available on the federal reserve board website. bis central bankers ’ speeches over the past year, one - fourth of zip codes saw a decrease in prices over the same period. 3 moreover, those zip codes with falling prices have also experienced rising vacancy rates more often than in other zip codes. 4 these struggling high - vacancy areas provide evidence of the hard work that remains even as housing markets show signs of improvement. although many of these areas share a high level of vacancy, they differ significantly in other characteristics : the concentration of vacancies, age of the housing stock, cause of the problem, and even the demographics of the residents. by looking more closely at the differences, we will gain a better understanding of these markets and of the policies or program solutions that will address their vacancy issues most effectively. one measure that is frequently cited when describing recent improvements in the national housing market is the inventory of vacant homes for sale. this measure had fallen to 1. 6 million units in the second quarter of 2012, substantially below its peak of about 2 million units in 2010 and the first half of 2011. 5 however, many vacant homes are not on the market at all. these vacant units include properties that are in the foreclosure process, bank - owned properties that are not yet for sale, as well as properties for which the cause of vacancy has no connection to the foreclosure process. indeed, the stock of non - seasonal homes held off market is nearly two and a half times as large as the for - sale vacant stock. 6 but unlike the inventory of vacant homes for sale, this