In recent years, central bankers in the West have become proponents of the theory that a glut of savings from the developing world led to huge capital inflows into the US in the early 2000s. But did a hunger for investment from the developing world really fuel America’s housing boom? Moritz Schularick and Paul Wachtel take a close look at … Continue reading The massive inflow of foreign capital in the 2000s that enabled the American credit bubble was primarily from the private sector, not governments.
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