towards profits and increased corporate saving. As a result, both economies' current account surpluses widened before the … global financial crisis, and that of Germany has proven more persistent as domestic investment has remained subdued …

increases in investment that are followed by rapid declines. This investment response contrasts with the empirical evidence that … suggests a rather hump-shaped investment behavior. In this paper, I present a two-country general equilibrium model that … generates hump-shaped investment responses from labor market frictions. In the model, I decompose investment into tradable and …

been significant changes in saving and investment patterns across the world and imbalances have narrowed considerably. Does …

reduce their investment. This is the "Loanable Funds" theory. Ben Bernanke's "Global Saving Glut" thesis is based on this …There is a consensus among the majority of economists that the credit supply is limited by current household saving. If … governments or foreigners ran deficits, they would absorb this limited saving so that firms could not borrow any longer and had to …

This paper documents that cross-border investment income flows are important for explaining current account balances in … major economies. Those investment incomes reflect returns on cross-border asset holdings and on balance often reach … magnitudes around 5% of major economies' gross domestic product. I show that several correlates of this investment income balance …

emerging markets, their precautionary savings can generate substantial "global imbalances", especially if there is an … at a global level (though the required real interest may be negative). While a precautionary savings glut appears to be a …