Global saving glut

Savings glut also saving glut (English glut Saving, Savings glut ), is one of Ben Bernanke 2005 term used to describe a hypothesis that is a surplus of savings in comparison to the investment opportunities worldwide. For the individual economy, a savings glut created a tendency instead to finance the investments export surpluses. According to Bernanke observed this for both the advanced industrial countries and for developing countries. A recipient country of export surpluses is the U.S., which have a strong foreign trade deficit.

For Carl Christian von Weizsäcker is the " Savings Glut- thesis " related to the capital- theory-based thesis of the possibility of negative equilibrium real interest rate. In this situation would the equilibrium real interest rate, which leads to the same high level of investment and savings, less than zero.

Causes

Bernanke lists several reasons for the savings glut.

In industrialized countries,

• Demographic aging: As the number of pensioners in comparison to the number of workers increases due to demographic factors, have to save more. Expressed capital theory: The wealth creation request for the purpose of pension plans may be greater at a real rate zero not be accommodated in the form of real capital in the production process. The equilibrium real interest rate is less than zero.

• Lack of opportunities for decreasing growth or shrinkage of the labor force
• High capital intensity, which leads to lower profitability of the investment.

As a result, mature economies try to achieve a trade surplus, exporting them as a net capital.

Developing countries

• " War chests " in foreign exchange: In order to mitigate financial crises, a number of emerging economies have started to accumulate foreign exchange. Should it come to the capital flight during crises that can keep up with the help of foreign exchange, liquidity and the exchange rate to be defended.

• Export promotion, by an appreciation of the currency is prevented by buying foreign currency ( usually the U.S. dollar, this monetary system is also known as Bretton Woods II regime ).

• Rise in oil prices: Oil-exporting countries of the Middle East and Russia, Nigeria and Venezuela achieve export surpluses. This revenue they try on world capital markets to invest.

United States as the country of import

The U.S. was attractive to foreign investors after Bernanke because of new technologies and increasing productivity. The current flowing in the U.S. capital increased the value of the dollar, making imports cheaper in dollar terms were and exports more expensive in foreign currency expected. Thus, the foreign trade deficit in the U.S. rose. Niall Ferguson coined specifically for this regime between U.S. and China, the term " Chimerica ".

The consequences of the savings glut

• Rising global imbalances in foreign trade
• Low interest rates: Planned savings, which are higher than the planned investments, lead to a fall in the interest rate.
• Rising asset prices as a result of lower interest rates.

Criticism

The thesis of a savings glut is doubted by Hans -Werner Sinn. Rather, the U.S. had spent more than occupied and therefore greatly indebted abroad. The U.S. government would have encouraged private debt in the U.S. to support private consumption. This led to a reduction of the savings in the U.S.. The savings were provided from abroad, but in a non-sustainable way.

An alternative to the saving glut thesis thesis is the thesis of the " banking glut", which returns the low interest rates on the monetary policy of central banks.