The dual inefficiency of global finance

“ F inance ” refers to the mechanism s by which savings are transformed into financing for the economy. We note that global finance has two serious inefficiencies: It channels savings from poor countries to the richest country, the United States, which obviously reduces efficiency in the allocation of savings; It finances current fiscal deficits and housing investment in value rather than volume terms much more than productive investment. Instead, it would be better if global savings financed efficient productive investments in poor countries first.