Fed chair attends first G20 meeting since taking office, calls it 'a new era of sustained growth'

Federal Reserve Chair Kevin Warsh attends the Jackson Hole Economic Symposium in Jackson Hole, Wyoming, on Friday. [AP]
Federal Reserve Chair Kevin Warsh attends the Jackson Hole Economic Symposium in Jackson Hole, Wyoming, on Friday. [AP]

Federal Reserve Chair Kevin Warsh said the global economy has moved beyond the era of the "savings glut" and entered a new phase defined by an "investment surge."

Speaking at the opening plenary of the G20 finance ministers and central bank governors meeting in Asheville, North Carolina, on Monday (local time), Warsh said, "If I were to define this moment, I would call it a period of global investment surge," according to Reuters and other media.

Warsh noted that "global savings glut" had been a dominant theme at G20 meetings for years — both before and after the 2008 global financial crisis — but said "the situation has reversed." Where a lack of investment opportunities once left capital sitting idle rather than flowing into productive use, the world has now shifted to a phase in which a global expansion of investment is driving economic growth, he said.

Warsh said the concept of "secular stagnation," once another defining concern for the global economy, no longer fits the current moment. "Standing here today, marking 100 days in office, secular stagnation feels like a description of a very distant past," he said. "The new era is closer to sustained growth."

Warsh described the global economy as being in a period of "tremendous change," and said policymakers must draw on the knowledge and experience they have accumulated while at the same time recognizing the need to adapt.


yckim6452@heraldcorp.com