The Atlanta Fed's macroblog provides commentary and analysis on economic topics including monetary policy, macroeconomic developments, inflation, labor economics, and financial issues.

Authors for macroblog are Dave Altig, John Robertson, and other Atlanta Fed economists and researchers.

« The Chairman Speaks: How Should We Measure Labor Compensation? | Main | The Chairman Speaks: Why Don't Rising Productivity Tides Raise All Boats (Equally)? »

July 20, 2006

The Chairman Speaks: The Savings Glut Persists

More from Chairman Bernanke's exchange with Senator Bennett during yesterday's testimony:

BENNETT: Do you still believe there's a global savings glut and that we can expect people to continue to want to put their money here?

BERNANKE: I think there still is a global savings glut. It may have moderated somewhat because of increased growth in some of our trading partners. But on the other hand, there's also been, of course, these large revenues that the oil producers are accumulating because of the high price of oil. They are not able to absorb - - use those revenues at home very quickly. So they are taking that money and putting it back into the global financial system. And so that's contributing to this overall global savings glut...

So I think there has been some change, but the broad idea that the global savings glut is out there I think is still valid.

Of what Mr. Bernanke speaks, in pictures:






Still looking pretty gluttish.  The data, if you are interested:

Download savings_glut.ppt

UPDATE: Shame on me.  I should have added this part of the discussion:

BENNETT: So you're suggesting that foreign investment in the United States is not about to dry up at any point soon?

BERNANKE: I don't think it's going to dry up. I do think that over a period of time we should become more reliant on our own saving and reduce the current account deficit.

Emphasis added.

July 20, 2006 in Federal Reserve and Monetary Policy , Saving, Capital, and Investment | Permalink


TrackBack URL for this entry:

Listed below are links to blogs that reference The Chairman Speaks: The Savings Glut Persists :


The savings glut leads me to believe that responsible monetary policy is to continue raising interest rates. The cost of money is still CHEAP.

Posted by: jeff | July 20, 2006 at 08:34 PM

Post a comment

Comments are moderated and will not appear until the moderator has approved them.

If you have a TypeKey or TypePad account, please Sign in