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A Theory of Accumulation and Secular Stagnation: A Malthusian Approach to Understanding a Contemporary MalaiseAccumulation and Secular Stagnation in the United States after the Turn of the Millennium

A Theory of Accumulation and Secular Stagnation: A Malthusian Approach to Understanding a... [A US current account deficit implies that foreigners spend less in the US than they earn from the US. If they intend not to increase their US spending in the future, they are accumulators. The mercantilist policies of Southeast Asia and China, which involved hoarding dollar assets to build up buffer reserves and to support undervalued currencies, was a form of accumulation. They did not intend to spend their dollar savings, for doing so would undermine their objectives. Top income earners who intend to leave large bequests to their heirs are also Accumulators. Mercantilist driven current account deficits and income concentration both increased markedly in the 2000’s. The resultant Accumulation lowered US trend growth and increased volatility; a predicament that has been called “secular stagnation”.] http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png

A Theory of Accumulation and Secular Stagnation: A Malthusian Approach to Understanding a Contemporary MalaiseAccumulation and Secular Stagnation in the United States after the Turn of the Millennium

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Publisher
Palgrave Macmillan US
Copyright
© The Editor(s) (if applicable) and The Author(s) 2016
ISBN
978-1-349-71984-6
Pages
88 –123
DOI
10.1057/9781137562210_5
Publisher site
See Chapter on Publisher Site

Abstract

[A US current account deficit implies that foreigners spend less in the US than they earn from the US. If they intend not to increase their US spending in the future, they are accumulators. The mercantilist policies of Southeast Asia and China, which involved hoarding dollar assets to build up buffer reserves and to support undervalued currencies, was a form of accumulation. They did not intend to spend their dollar savings, for doing so would undermine their objectives. Top income earners who intend to leave large bequests to their heirs are also Accumulators. Mercantilist driven current account deficits and income concentration both increased markedly in the 2000’s. The resultant Accumulation lowered US trend growth and increased volatility; a predicament that has been called “secular stagnation”.]

Published: Aug 5, 2016

Keywords: Chinese saving; current account deficit; income concentration; permanent income hypothesis; Mercantilism; safe asset shortage

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