I’ll start where I left off last week - my claim that China’s excess savings are squeezing out Germany’s (and consequently the euro area’s). You can see this in the chart below, where I’m showing the current account balance of China, Germany, and the euro area, respectively, as a share of global GDP. Why world GDP? Because I’m interested in the bird’s eye view: how much do the respective economies’ (excess) savings move the needle on a global level? {chart} This chart is worth unpacking in some detail. First of all, Germany’s surplus (dashed line) is large enough to figure on a world level. Between the late 2000s ... (full story)