Attention Economy


Monday, November 28, 2016

Saving-Investment Gap and Trade and Current Account Imbalances

Two timely articles:

Yale economist Stephen Roach notes -
“Donald Trump’s economic strategy is severely flawed. The US president-elect wants to restore growth via deficit spending in a country with a chronic shortfall of saving. This points to a further compression in national saving, making a widening of an already outsize trade gap all but inevitable.”

As a percent of GDP, Germany’s current account surplus dwarfs China’s surplus
http://www.spiegel.de/international/germany/germany-preparing-for-trade-conflict-with-donald-trump-a-1123136.html
“There are plenty of reasons for that. Germany's current account surplus has never been as high as it is this year and never before has that surplus represented such a significant share of the country's gross domestic product. Making matters worse is the fact that the US is the largest consumer of German exports.”