The Global Economy’s Bizarre Problem: Too Much Money

After global recession struck in 2008, the US injected money into the economy to reduce interest rates and encourage lending. The US effort was described as successful and Japan and Europe soon followed. Overall, the global economy is still sluggish, economic uncertainty lingers. Companies, normally competitive, hesitate to expand or invest in research. Individual and corporate investors compete to find safe havens for excess savings. One theory suggests that the choice to save versus invest is due to demographic and technological shifts. Another theory suggests that investors, once burned by crisis, seek safety while waiting for the economy to improve. China could be a model in investing savings to forge partnerships, including the new Asian Infrastructure Investment Bank. Matt Phillips notes for Quartz: “With corporate investment weak, it now falls to governments to spend more, on long-term investments that can boost productivity and give the economy a nudge.” – YaleGlobal