Can Draghi's €800 Billion Plan Save Europe from Decline?
The David McWilliams Podcast
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Surplus Savings Stagnate Growth
An increase in the national saving ratio accompanied by decreased government spending leads to excess savings, resulting in a surplus. This surplus occurs when people are not investing, creating a current account surplus where external entities utilize the saved funds rather than local investments. Consequently, the stagnant surplus funds remain largely inactive within banks, which fail to effectively channel these savings into investments.
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