Net Lending Research Articles

Disposable income, saving and net lending / net borrowing: Colombia

Disposable income, saving and net lending / net borrowing: Colombia

Disposable income, saving and net lending / net borrowing: Greece

Disposable income, saving and net lending / net borrowing: Greece

Disposable income, saving and net lending / net borrowing: United States

Disposable income, saving and net lending / net borrowing: United States

Disposable income, saving and net lending / net borrowing: Slovenia

Disposable income, saving and net lending / net borrowing: Slovenia

Disposable income, saving and net lending / net borrowing: Chile

Disposable income, saving and net lending / net borrowing: Chile

Disposable income, saving and net lending / net borrowing: Korea

Disposable income, saving and net lending / net borrowing: Korea

Disposable income, saving and net lending / net borrowing: Portugal

Disposable income, saving and net lending / net borrowing: Portugal

Disposable income, saving and net lending / net borrowing: Latvia

Disposable income, saving and net lending / net borrowing: Latvia

Disposable income, saving and net lending / net borrowing: France

Disposable income, saving and net lending / net borrowing: France

Disposable income, saving and net lending / net borrowing: Estonia

Disposable income, saving and net lending / net borrowing: Estonia

Disposable income, saving and net lending / net borrowing: Japan

Disposable income, saving and net lending / net borrowing: Japan

Disposable income, saving and net lending / net borrowing: Slovak Republic

Disposable income, saving and net lending / net borrowing: Slovak Republic

Disposable income, saving and net lending / net borrowing: Canada

Disposable income, saving and net lending / net borrowing: Canada

Disposable income, saving and net lending / net borrowing: United Kingdom

Disposable income, saving and net lending / net borrowing: United Kingdom

Disposable income, saving and net lending / net borrowing: Finland

Disposable income, saving and net lending / net borrowing: Finland

Disposable income, saving and net lending / net borrowing: Australia

Disposable income, saving and net lending / net borrowing: Australia

The Rise of Corporate Net Lending Among G7 Countries: A Firm-Level Analysis

ABSTRACT In recent decades, corporate net lending has been increasing in several developed countries. This paper discusses the impact of financialisation and income distribution on the level of net lending of listed non-financial corporations in G7 countries. We argue that financialisation affects the level of corporate net lending through firms' re-organisation towards a model of accumulation based on the maximisation of ‘shareholder value’ and through its negative impact on investment. Moreover, the reduction in the wage share can increase corporate capacity for liquidity accumulation, thus increasing the gap between corporate savings and investment, contributing to the rise in net lending. We test our hypotheses using panel data of publicly listed non-financial corporations for the period 1990–2015. According to our findings the process of financialisation has a positive impact on the level of net lending after 2001, while the wage share at the firm level has a strong negative impact on the level of net lending throughout the whole period.

Why the COVID-19 Pandemic Could Increase the Corporate Saving Trend in the Long Run

Given the global trend in corporate saving over the last decades, the COVID-19 crisis raises doubts about the persistence of companies’ saving behaviour due to the losses which have occurred in many companies caused by the isolation of households and by lockdowns. Before the pandemic, corporate net lending activities had been increasing for decades due to various factors ranging from the rise in uncertainty after the global financial crisis to the increased reliance on internal funding for research and development expenditures. In Germany, the rise in corporate saving was accompanied by an increase in equity capital and a reduction in the corporate sector’s reliance on bank loans. This article argues that the coronavirus crisis is most likely to interrupt the trend in corporate saving in the short run due to the decline in companies’ revenues. Nonetheless, similar to the pattern observed in the aftermath of the financial crisis, it seems reasonable to conjecture that the COVID-19 shock will strengthen corporate saving in the long run as companies may attempt to restore their liquidity and equity capital buffers to better prepare for future shocks. This will in turn create downward pressure on real interest rates and complicate the conduct of monetary policy.

Germany and China Have Savings Gluts, the USA Is a Sump: So What?

A “global saving glut” was invented by Ben Bernanke in 2005 as a label for positive net lending (imports exceeding exports) to the American economy by the rest of the world. This trading situation had already emerged around 1980 and led to the Plaza Accord in 1985. One common explanation is based on the Mundell–Fleming IS/LM/BP model. But this model cannot be valid, since the “BP” equation is not independent of “IS.” Other champions of this saving glut hypothesis rely on loanable funds theory, which is institutionally inadequate. More plausible analyses of the persistent trade imbalance can be derived from a two-country IS/LM set-up devised by Wynne Godley, a Kaleckian description of the political economy of East Asia and the United States, and dissection of the terms of trade due to W. Arthur Lewis and Luigi Pasinetti.

Germany and China Have Savings Gluts, the USA Is a Sump: So What?

A “global saving glut” was invented by Ben Bernanke in 2005 as a label for positive net lending (imports exceeding exports) to the American economy by the rest of the world. This trading situation had already emerged around 1980, and led to the Plaza Accord in 1985. One common explanation is based on the Mundell-Fleming IS/LM/BP model. But this model cannot be valid, since the “BP” equation is not independent of “IS.” Other champions of this saving glut hypothesis rely on loanable funds theory, which is institutionally inadequate. More plausible analyses of the persistent trade imbalance can be derived from a two-country IS/LM set-up devised by Wynne Godley, a Kaleckian description of the political economy of East Asia and the United States, and dissection of the terms of trade due to W. Arthur Lewis and Luigi Pasinetti.