Matthew Boesler — Richard Koo Answers The Most Critical Question About The Western Economies: Is The Deleveraging Over?

The shift to negative net savings in the household sector is supposed to be bullish for the U.S. economy. The implication is that at the end of 2012, households finally started borrowing again – spending again – as opposed to paying off past debts.

Koo, however, suggests that observers are missing the details, which paint a much bleaker picture 

In fact, according to Koo, the way in which the household sector shifted to net negative savings at the end of 2012 has only been observed twice before in recent memory. The first time was following the collapse of the internet bubble in 2000, and the second time was following the collapse of Lehman Brothers in 2008.

Business Insider
Richard Koo Answers The Most Critical Question About The Western Economies: Is The Deleveraging Over?
Matthew Boesler