While they partly reflect the ongoing adjustment to the earlier big run up in housing debt and housing prices, the evidence that I have talked about today suggests that there are also other factors at play. In particular, many households appear to have increased their saving in response to the decline in equity prices and an increase in uncertainty about the future.
Various studies pointed to a positive correlation between the volume of loans granted to the private sector and economic development 1 These results would appear to confirm the finance-led growth dream. I will come back to this. But is the situation the same for advanced economies on the one hand and emerging ones, like South Africa, on the other? Well, not entirely.