Monetary policy has failed alone to lift the U.S. economy, because the private sector is obsessed with minimising debt, according to Nomura Chief Economist Richard Ko.
Speaking this weekend at George Soros’ Institute for New Economic Thinking conference at Bretton Woods, Koo outlined why the U.S. and Europe have missed the lessons of the Japanese experience.
Koo’s presentation explains how the U.S and Europe have expanded their monetary base, but that this flood of cash isn’t driving economic growth because banks, businesses, and people are paying down debt. Koo says that only the government can step in to spend the excess savings in the market.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.