The corporate sector thus transitioned from being a net borrower of funds to being a net lender to the rest of the global economy – in the early 1980s most investment spending at the global level was funded by household sector savings, whereas by 2010 nearly two-thirds of investment spending at the global level was funded by corporate sector savings.
I cannot conclude my remarks without mentioning a piece of work by Loukas that has garnered a lot of attention and that he presented at the workshop on macroeconomics in southern Europe just before this award ceremony. Loukas’s paper, “Capital Allocation and Productivity in South Europe”6, offers an explanation of the productivity decline in southern European countries.