Reading this muddle only strengthens my conviction that we should ban the word 'savings' from macro
Reposted from
Tomas Hirst
Wolf just casually chucking around the idea of the global reserve currency provider raising capital controls *in the interest of financial stability*. Is it April 1st already? on.ft.com/3ZLo1zB
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https://bsky.app/profile/jbielsacallau.bsky.social/post/3lsdmr3rg222d
Sometimes, what works in monetary macro terms doesn't hold up in straight macroeconomics.
Anyway, I just wanted to clarify where the phrase might come from.
And yes, investment represents all that isn't consumption, which is a very vague definition, but it is key.
In order to be able of generating enough savings to finance your investment, you need to export a lot of manufactures.
There could be other ways of achieving the same, but no country has found the way to do so.
It is a theoretical-empirical assertion.
I see it this way: "Pettis's stuff", rather than theoretical cause-and-effect models, should be seen as a return to fundamentals, data, and history.
In my opinion, this combination beats other approaches in this financially insane world.