In reply to @michaelxpettis
2/4 They see domestic income inequality in the US as weakening domestic demand and raising ex ante savings (which they later call "the savings glut of the rich"). This in turn accommodates (requires) increases in household and fiscal debt.
@michaelxpettis | 109,163 followers
Replying to @michaelxpettis
3/4 We argue that US absorption of the global savings glut creates many of the same distortions. In either case, and in similar ways, the economy must accommodate the resulting higher ex-ante savings, usually by reducing savings elsewhere within the economy.

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