The 'savings glut' question, resurrected
There had been some discussion about whether bubbles in the US and European markets were caused by a global savings glut in Asia. Stefan Karlsson says no, citing the economic woes in Japan as compared to market health in Australia.
There had been some discussion about whether bubbles in the US and European markets were caused by a global savings glut in Asia. Stefan Karlsson says no, citing the economic woes in Japan as compared to market health in Australia.
By Stefan Karlsson, Guest blogger
A reader asked me to comment on聽this Telegraph-article聽where the author blames bubbles in both America and Europe on a global savings glut created in Asia, as opposed to central bank manipulation (it should be mentioned that the article acknowledges a role for central banks, but this is described as a secondary effect provoked by the savings glut).聽I have previously discussed聽the alleged role of the "savings glut" for the American bubble when advanced by Alan Greenspan, and here is what I wrote: