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This suggests staggering flows of savings into equities.
To judge from the flows of savings into Treasurys and high-quality corporate bonds, neither yielding more than a pittance, most investors are befuddled.
Financial Times columnist Martin Wolf, in his latest book, Fixing Global Finance, gives further evidence of these large flows of savings to high-income countries.
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This releases a higher flow of savings into the economy, enabling higher investment ratios to be maintained.
But the basic, underlying cause is society's inadequate provision for an even flow of savings out of the excess of production over consumption.
This makes capital budgeting less attractive, particularly if the government wishes to use the budget to supplement the national flow of savings.
Homebuilding activity responds quickly to changes in the availability of mortgage money from the principal mortgage lending institutions, and thus forecasters follow closely the flow of savings to these institutions and also the level of commitments that have been made to finance future construction.
Rutherford (1999) describes three basic ways people can covert a flow of savings into a lump sum: 'saving up,'savingng down,' and 'saving through'.
Because China has such a huge flow of savings – and can count on that flow not only continuing but increasing – it can comfortably take on gigantic investment projects that would intimidate other nations.
As Greenspan, among others, has repeatedly (and again recently) demonstrated, these unusually low interest rates were due primarily to a massive flow of savings from emerging economies in Asia and elsewhere.
But he admits that saving outside the U.S. exceeded investment by a substantial margin, which was all that was needed to explain the flow of savings to the U.S. Taylor puts a lot of weight on the fact that there is no global gap between saving and investment, but you wouldn't expect there to be.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com