COVID-Economics Links (May 13)

Where did the saving glut go?

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...

The increasing number of Euro fools.

Via the Irish Economy Blog I find this very interesting interview of Mario Draghi with Der Spiegel . I was first surprised by the aggressive responses from Draghi every time he is asked about the German negative assessment of recent ECB monetary policy. I like his honesty and clarity when he asserts that all German fears about increasing inflation in the Euro area have turned to be wrong. Here is one of his answers: "DRAGHI: No, but the fears felt by some sectors of the public in Germany have not been confirmed. What haven’t we been accused of? When we offered European banks additional liquidity two years ago, it was said there would be a high rate of inflation. Nothing has happened. When I made my comment in London, there was talk of a violation of the central bank’s mandate. But we had made clear from the beginning that we are moving within our mandate. Each time it was said, for goodness’ sake, this Italian is ruining Germany. There was this perverse Angst that things w...

What Happens When You Drink Enough Water

Tridona Bestsellers If you’re reading this: Drink a glass of water. You likely need it, as 75 percent of Americans are described as “chronically dehydrated.” While achieving a state of hydration might seem enviable and impossible, fret not because it’s doable. And the health benefits are not only encouraging, but they are also downright inspiring in the immediate short term, but especially in the long run. “Long-term hydration is the single best thing we can do to prevent chronic illness,” says Dr. Dana Cohen, an integrative medicine specialist in New York and coauthor of Quench: Beat Fatigue, Drop Weight, and Heal Your Body Through the New Science of Optimum Hydration . Though the eight-cup rule is popular, there is no one-size-fits-all number. Instead, it’s more of an individual approach. The new general rule of thumb is half your weight in ounces, according to Dr. Cohen. For example, if you weigh 120 pounds, you need to drink 60 ounces of water a day.

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