The main problem of the global economy is the shortfall in consumption

- "Almost all regions of the world are currently suffering from the shortfall in household consumption:
• in the United States and Europe because of the imbalance of the balance sheets of households (excess indebtedness relative to wealth) and the distortion of income sharing at the expense of wage earners;
• in Japan, due to the constant distortion of income sharing in favour of companies;
• in China, because of the insufficient share of wages in GDP;
• also in Asian emerging countries other than China, India and oilproducing countries, but not in Latin America or Central Europe."
- "The shortfall in consumption is weakening global growth, since there is a savings glut. Furthermore, it is making the global economy more cyclical and more erratic. The reason is that the weight of the most volatile demand components (investment in construction, corporate investment) is too high."
- "Fiscal deficits cannot be a permanent remedy, but a rise in the share of wages in GDP can be a remedy in many countries."

Natixis Flash Economics 442 20100909

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