Federal Reserve (Fed) Chair Kevin Warsh said the world economy has moved past the era of a "savings glut" into a new phase marked by a sharp increase in investment.
According to Reuters on the 31st (local time), Warsh said at the opening plenary of the Group of 20 (G20) finance ministers and Central Bank governors' meeting held in Asheville, North Carolina, that "if we were to define this moment, we could say it is a period of surging global investment."
Warsh referred to the "global savings glut," which had been a major economic issue at past G20 meetings, and assessed that the current situation is the exact opposite of that time.
Around the time of the global financial crisis, excess savings accumulated as funds could not find suitable investment destinations, making the savings glut a major problem for the world economy, but now the environment has shifted so that large-scale investment is driving economic growth.
Warsh also said that, given this change, the concept of "secular stagnation," which had been used to describe the world economy, no longer fits the current situation.
He said, "Standing here on my 100th day in office, secular stagnation feels like a term that describes a very distant past," adding, "the new period is closer to 'secular growth.'"
He also said the world economy is going through "a period of tremendous change," and that policymakers in each country need to both draw on their accumulated knowledge and experience and adapt to the changed economic environment.