This week in Mises Daily: David Howden makes it easy to understand the Savings Glut vs. Easy Money debate around the causes of the current crisis:
Proponents of the global savings glut hypothesis must grapple with one unanswered question: What caused citizens of Asian countries to increase their savings rate and destabilize Western economies with their excess capital outflows? One could take the view that savings rates are exogenously determined — e.g., by animal spirits — yet this “explanation” only pushes the problem one step back. What determines these animal spirits?
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