The economy of the 21st century in the OECD countries and in China is characterized by a new
phenomenon: the structural surplus of private savings in relation to private investment. This
is true even in a situation of prosperity and very low interest rates. On the one hand this
excess saving is due to people's increasing inclination to save in light of rising life
expectancy driven by the desire to have sufficient assets in old age. On the other hand the
demand for capital is not increasing to the same extent so that investment is not keeping pace
with the rising desire to save. The resulting gap between the private desire for wealth and
private investment can only be closed by increasing public debt. This open access book offers a
new capital-theoretical perspective on the macroeconomic relationship between desired wealth
and investment and it presents new empirical data on private wealth and its composition in the
OECD plus China area. The authors argue that a free economic and social order can only be
stabilized if the wealth aspirations of individuals are met under conditions of price
stability. This is not possible without substantial net public debt. A new way of thinking
about the economy as a whole is required. By way of an in-depth theoretical and empirical
analysis the book demonstrates this new way of thinking and describes the current challenges
facing economic policy. It will appeal to economists and students of economics who are
interested in macroeconomic theory and its economic policy implications. An impressive and
convincing theoretical dive into the fundamentals behind secular stagnation with very strong
implications for actual debt policy. Public debt may be needed to improve welfare.- Olivier
Blanchard Senior Fellow at the Peterson Institute for International Economics and Professor of
Economics Emeritus at Massachusetts Institute of Technology (MIT). Chief Economist at the
International Monetary Fund from 2008 to 2015. Saving and Investment in the Twenty-First
Century gives a wholly new perspective on macroeconomics. (...) Weizsäcker and Krämer describe
a simple practical solution to the underemployment that has plagued Southern Europe for more
than a decade.- George Akerlof Nobel Laureate in Economics 2001. Professor at the McCourt
School of Public Policy at Georgetown University and Professor of Economics Emeritus at the
University of California Berkeley. This is a profound and original contribution that can help
us to understand and act on the great issues of our times.- Nicholas Stern Grantham Research
Institute on Climate Change and the Environment at the London School of Economics. Author of
the Stern Review Report on the Economics of Climate Change. Chief Economist at the World Bank
from 2000 to 2003.
