Bernanke And The Shibboleths

This article explains how we have an excess desired amount of savings over desired investment. This article also relates to chapter 7 with unemployment. It says that if we were at full employment, demand for funds would be higher than equilibrium and expansion can hopefully take place. This can be attributed to over borrowing, which in turn left a lot of the world credit constrained (even at an interest rate of zero). The Fed speaks about persuading spending to offset these cuts.