I am attaching a document
describing the idea I presented on Tuesday about the role of the financial system in decoupling saving from real economy.
Here is the slide
It is a short paper I wrote together with Paolo Tasca who at the time was doing his PhD with me. We did not further develop the concept but I think it’s very relevant to GSS, because if we do not understand how this decoupling can be mitigated, it will be very difficult to address global issues effectively.
I think there are some objections to the approach used in the paper around the issue of internalizing externalities and I would be happy to hear them.