Martin Wolf; to turn the surplus in some countries into productive investment elsewhere

John Maynard Keynes: actual spending activates potential savings. Moreover, he argued, there is no reason to believe that the needed spending will happen naturally.

He called this “the paradox of thrift”.

https://www.suerf.org/wp-content/uploads/2023/11/f_8f7fe48f0ffd0d5572f0d34af4723004_23231_suerf.pdf

Today, the structural excess savings of a number of economies, notably China, Germany and Japan

Just these big three surplus economies ran aggregate current account surpluses of $884bn in 2024

Surpluses are only made possible by deficits. Thus the US ran a current account deficit of $1.134tn

Prior to the 2008 financial crisis, domestic spending had predominantly been driven by credit-fuelled property booms. 

Is that a good result of the liberalisation of the global capital accounts? Hardly! 

It is a huge failure that all these surplus savings are frittered away in this way, rather than invested in productive activities, above all in poorer countries.

Without macroeconomic rebalancing, the US trade deficits will remain. 

A necessary condition for this is to slash US fiscal deficits, along with policy changes elsewhere, notably China

Martin Wolf Financial Times 13 May 2025

https://www.ft.com/content/c7159108-b58b-4af8-8296-203ac6915ae0

Grundbultsfrågan: Hur blir S = I ???

Savings and investment, being different activities carried on by different people

Man återkommer ständigt till Keynes och Hayek.  

 https://www.internetional.se/stabiliseringspolitik.htm

US Trade deficit; plus ça change, plus c'est la même chose

https://englundmacro.blogspot.com/2025/05/us-trade-deficit-plus-ca-change-plus.html