Tuesday 27 September 2016

What's Different This Time Around in the U.S. Economy?

Answer: there never was an economic boom this time (2009-2016).

In the run-up to the 2000 and 2007 stock market peaks, domestic investments expanded rapidly (dotted line). Since 2007 however, the longer term investment growth rate has plunged....


...representing the longest slump ever in 10-year annualised growth in investments relative to savings based on data going back to 1947.


The one piece of good news about this development is that malinvestments relative to savings are likely smaller this time around as a result. If so, this will serve to "soften the economic blow" during the next GDP recession, which, by the looks of things (e.g. here), are just around the corner.

Related: Why GDP Growth Will Slide For Years To Come

No comments:

Post a Comment