Fed Chair Warsh: "Global Economy Shifting from Savings Glut to Investment Surge"

"Secular stagnation is a thing of the past...
This new era is one of 'secular growth'"

"Highlighting a period of tremendous transformation in the global economy"

Kevin Warsh, Chair of the U.S. Federal Reserve, has assessed that the global economy has moved beyond the era of a 'savings glut' and is now entering a phase of an 'investment surge.' As investments in artificial intelligence (AI), advanced industries, and other sectors continue to expand, there is a growing assessment that the primary focus of the global economy has shifted from 'secular stagnation' to 'secular growth.'

According to international media reports on August 31 (local time), Chair Warsh stated at the opening plenary session of the G20 Finance Ministers and Central Bank Governors Meeting held in Asheville, North Carolina, "If we are to define this current moment, we can say it is a period of global investment surge."

Kevin Warsh, Nominee for Fed Chair_AP Yonhap News.

Chair Warsh emphasized that, while 'global savings glut' was a major topic at the G20 meetings in the years before and after the 2008 global financial crisis, the situation has now changed.

The term 'savings glut' refers to a phenomenon where savings outpace investment demand globally, preventing funds from sufficiently flowing into productive investment. Chair Warsh's remarks are interpreted to mean that, in contrast, the global economy has recently transitioned into a phase where large-scale investments are driving growth.

According to Chair Warsh, due to this shift, the previously key concept used to define the global economy—'secular stagnation'—is no longer applicable to the current situation.

He said, "Looking back on my first 100 days in office, it now seems that secular stagnation describes a long-ago past," adding, "This new era is closer to 'secular growth.'"

He further emphasized that the global economy is in "a period of tremendous change," and called on policymakers in each country to not only leverage their accumulated knowledge and experience, but also to adapt their policy thinking to the new economic environment.

This content was produced with the assistance of AI translation services.