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"A World Macro Saving Fact and an Explanation,"
revised July 2012.
pdf file.
Abstract
The world macro saving fact concerns the total financial saving of the world's
private sector divided by world GDP.\
Relative to changes before 1994, there
was a huge fall in this ratio between 1995 and 2000, a huge increase
between 2000 and 2003, a huge fall between 2003 and 2006, and a huge
increase between 2006 and 2009.
This fact is documented in this paper.
The paper also shows
that the fluctuations in this ratio
are highly correlated with lagged fluctuations in
world stock and housing prices. It appears that much of the increased
variation in the world private financial saving rate since 1995
can be explained by (a largely unpredictable)
increased variation in forces that affect world asset prices.
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