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The private saving glut and the developed countries' government financial balance

Author

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  • Leon Podkaminer

    (The Vienna Institute for International Economic Studies, Austria)

Abstract

The 'global saving glut' Ã la Bernanke is not a serious problem for a large group of high-income countries considered collectively. More importantly, taken together these countries exhibit a tendency for a growing GDP share of private-sector saving and a falling GDP share of private investment. Given prevailing tendencies regarding income distribution and gross capital formation, the private sector of developed countries considered collectively is prone to accumulating 'saving gluts' which is reflected in persistent public-sector financial deficits. Fiscal policy may need to support growth with the debt-financed income injections more or less permanently, and not just in response to 'cyclical' growth slow-downs or occasional recessions.

Suggested Citation

  • Leon Podkaminer, 2019. "The private saving glut and the developed countries' government financial balance," Review of Keynesian Economics, Edward Elgar Publishing, vol. 7(1), pages 94-107, January.
    • Handle: RePEc:elg:rokejn:v:7:y:2019:i:1:p94-107
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    Citations

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    Cited by:

    1. Philipp Heimberger & Leon Podkaminer & Sandor Richter, 2018. "Monthly Report No. 10/2018," wiiw Monthly Reports 2018-10, The Vienna Institute for International Economic Studies, wiiw.

    More about this item

    Keywords

    aggregate financial balances; excess private saving; secular stagnation; fiscal policy;
    All these keywords.

    JEL classification:

    • E10 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - General
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory

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