Hi Michael, love your paper, I have a question on pages 8-9 of PDF
I am confused there seems to be a contradiction in low/high saving rates (SR) in deficit/surplus countries (See img)
In Yellow : You write “high SR in deficit countries” but in next paragraph “SR is lower” ...
1/n
2/n
... when workers retain greater share of prod (ie deficit countries)
Green : you write “surplus countries have higher SR” twice but finish the 2nd paragraph with “lower SR in surplus countries”
+ the table shows higher SR in surplus vs deficit countries
I would have thought lower SR in deficit countries in that households have a greater share of the income plus they can spend it, whereas in surplus countries ...
...households have lower share of income and need to spend it all, while business, gvt and the wealthy earn more and spend less thus saving more and leading to higher SR in surplus countries
@michaelpettis.bsky.social
I think its typos and, I would read either "surplus" countries or "low" saving rates in the first highlight.
There's also a typo in the 2nd paragraph, last sentence (in green) which adds to the confusion.
for me the 2nd typo should read "higher saving rates"
Agreed. Presumably, as a sector, households in surplus countries have low savings due to their reduced share of income leading to higher household indebtedness (relative to their share of GDP -- I've heard Michael say this is true of China) but it does sound like he's talking about countries overall
Comments
I am confused there seems to be a contradiction in low/high saving rates (SR) in deficit/surplus countries (See img)
In Yellow : You write “high SR in deficit countries” but in next paragraph “SR is lower” ...
1/n
... when workers retain greater share of prod (ie deficit countries)
Green : you write “surplus countries have higher SR” twice but finish the 2nd paragraph with “lower SR in surplus countries”
+ the table shows higher SR in surplus vs deficit countries
Is it a typo? If not could you elaborate please ?
I would have thought lower SR in deficit countries in that households have a greater share of the income plus they can spend it, whereas in surplus countries ...
Once again very nice paper 👍
I think its typos and, I would read either "surplus" countries or "low" saving rates in the first highlight.
There's also a typo in the 2nd paragraph, last sentence (in green) which adds to the confusion.
for me the 2nd typo should read "higher saving rates"