Fed Chief Warsh Tells G20 Era of Savings Glut Has Given Way to Investment Surge
Fed Chairman Kevin Warsh told G20 finance leaders that a global investment surge has replaced the old savings glut, dismissing secular stagnation.
U.S. Federal Reserve Chairman Kevin Warsh addressed the G20 finance leaders on Monday, describing the current global economic climate as one of a "global investment surge." He made the remarks during the opening plenary session of the group's meeting in Asheville, North Carolina.
Warsh, who took office in May, was attending his first international economic policy gathering. He noted that previous G20 discussions, both before the 2008 financial crisis and in the years after, were dominated by concerns over a "global savings glut" — a situation where excess capital remained idle due to a lack of viable investment opportunities.
That dynamic, he argued, has now reversed. The world is instead witnessing a period of robust investment activity that is helping to drive economic growth. He added that the concept of secular stagnation, which posits a prolonged period of weak demand and low growth, no longer applies to the current situation.
Warsh also expressed interest in learning more about the growth prospects of the various member economies during the meetings.