How are the euro zone’s savings used?

An efficient, productive allocation of savings is needed for there to be strong and steady growth. Under France’s Ancien Régime, savings financed chateaus and churches, and there was no growth. From the first industrial revolution, savings financed productive capital and infrastructure (railways), and there was growth. What do we see in the euro zone today? Savings can be broken down into: “Inefficient” savings (which finance speculative purchases of financial and real estate assets and are not used to finance the economy; and fiscal deficits that result from public transfer spending); “Efficient” savings (which finance corporate investment, real estate construction in volume terms and public investment). We find that efficient savings represent roughly two-thirds and inefficient savings roughly one-third of savings in the euro zone .