Publication

Against the background of the severe turbulence hitting global stock markets in August 2015, this paper examines the slowdown in the Chinese economy. The author attributes this slowdown to an underlying domestic investment/savings imbalance that is so large that it will impact the global economy. Given the magnitude of this imbalance, he thinks it is unlikely to be solved by monetary policy and that the best that can be hoped for is that the various central banks around the world will manage to ‘paper over’ some of the unavoidable symptoms in credit markets.