Wednesday, August 10, 2011

Where does the US obtain the savings needed for investment, and by what process does it do so?

During the 90s, US private investment spending soared, while at the same time, the national savings rate fell sharply. According to econ 101, investment is financed with savings. If savings fell, how did the investment boom take place? Where did the US find its new savings, and by what process did it obtain them?

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