Empirical work expanding and fine-tuning the analysis of many scholars showed that several developed and emerging countries can be considered “managed floaters.” Less than a half of inflation targeting countries effectively apply a pure float. In this sense, the literature states that the reaction functions of central banks in inflation targeting emerging countries have a significant coefficient for the nominal exchange rate.
And, that world is one in which there is an elevated desire to save relative to the desire to invest. And when the appetite for saving is high and few people want to use those savings to invest in new assets, the return to saving is, unfortunately, inevitably low.