paul phillips wrote:
My followup question got lost in this reply so, in the light of subsequent comments, let me ask the question of Doug and others, why has the employment rate held up despite the negative savings rate,
According to Keynesian theory, the negative saving rate helps maintain aggregate demand at a high level and growth at a relatively high rate (compared to a few years ago). At some point, the saving rate should rise, encouraging lower aggregate demand growth or even a lower aggregate demand level. -- Jim Devine / "The truth is more important than the facts." -- Frank Lloyd Wright
