That ex post relationship, the correlation between actual--instead of intended--domestic saving and domestic investment was the object of the seminal work by Feldstein and Horioka a quarter century ago.4 Without the evident worldwide fall in home bias over the past  1  Joshua D. Coval and Tobias J. Moskowitz, "Home Bias at Home: Local Equity Preference in Domestic Portfolios," The Journal of Finance, December 1999, pp.
In the US, policy actions were faster, but still three years had passed after the residential real estate prices peaked in 2006, before overnight rates came down to levels seen in Japan. Third, it took time to recapitalize the banking system, which was most effective and vital in revitalizing the economy.