- Health versus wealth: On the distributional effects of controlling a pandemic - Jonathan Heathcote, Andrew Glover, Dirk Krueger, Víctor Ríos-Rull (VoxEU)
- The deflation threat from the virus will be long lasting - Gavyn Davies (FT)
- CBO’s Current Projections of GDP, Unemployment and Federal Deficit - Congressional Budget Office
- Coronavirus Projected to Trigger Worst Economic Downturn Since 1940s - WSJ
- Cash in the time of corona - Andreas Joseph, Christiane Kneer, Neeltje van Horen, Jumana Saleheen (VoxEU)
- Reweaving the social fabric after the crisis - Andrew Haldane (FT)
- German shops reopen but celebrations in Berlin muted - FT.com
- We need a better head start for the next pandemic - Mehdi Shiva (VoxEU)
- Forecasting recoveries is difficult: Evidence from past recessions - Zidong An, Prakash Loungani (VoxEU)
- Will central banks serve up fresh stimulus? - FT.com
I have written before about the investment dearth that took place in advanced economies at the same time that we witnessed a global saving glut as illustrated in the chart below. In particular, the 2002-2007 expansion saw lower investment rates than any of the previous two expansions. If one thinks about a simple demand/supply framework using the saving (supply) and investment (demand) curves, this means that the investment curve for these countries must have shifted inwards at the same time that world interest rates were coming down. But what about emerging markets? Emerging markets' investment did not fall during the last 10 years, to the contrary it accelerated very fast after 2000. This is more what one would expect as a reaction to the global saving glut. The additional saving must be going somewhere (saving must equal investment in the world). As interest rates are coming down, emerging markets engage in more investment (whether this is simply a move along a downward-sloppin...
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