Debunking the 'savings glut' thesis

Aca

Global savings glut or global banking glut? Yves Smith

Look after the unemployment, and the budget will look after itself: "Modern macroeconomics textbooks perpetuate the idea of a loanable funds market. In Greg Mankiw’s Principles, which is representative, we are taken back in time, to the theories that were prevalent before being destroyed by the intellectual advances provided in Keynes’ General Theory.

Mankiw assumes that it is reasonable to represent the financial system as the “market for loanable funds” where “all savers go to this market to deposit their savings, and all borrowers go to this market to get their loans. In this market, there is one interest rate, which is both the return to saving and the cost of borrowing.”"