First, if all of the spending increases are confined to the private sector, then the government budget deficit will shrink, as it did in the late 1990s, which would help narrow the potential saving shortfall. Second, if foreign economies do not share in the productivity boom, their demand for our exports will not expand in line with the increase in domestic demand.
4  BIS Review 90/2006  The dynamics of this process, and how long they take to play out, depend on several factors. One factor is how quickly the productivity change is incorporated into household and business expectations.