Graph 4  Now I know that this increase in household savings has not been universally welcomed by the retail sector. It has caused difficulties for some businesses, including those that based their business models on a continuation of the earlier trends.
But consider how the economy might have looked over the past few years had households spent an extra $ billion each  4  BIS central bankers’ speeches  year. It is likely that there would have been significant overheating. The exchange rate would have been higher. There would have been more borrowing from the rest of the world.