The Economist runs a story on the rise of the Asian consumer and points out that because of them, the world economy now has a back-up if the American consumer starts spending a little less. (hat-tip: Maurilio)
This all has me thinking about interest rates. Let's say the US economy slows down and even gets a little rocky, this would push interest rates down, right?
But I'm also looking at this new Asian consumer who, contrary to the traditional consumer from that part of the world, may actually have a lower savings rate. Asians saving less may push global interest rates up.
Now, like any good economic model, this would eventually reach equilibrium. The interesting question here is where would interest rates eventually come to rest, at the lower level as desired by the Americans, or at the higher levels as pushed up by shopping Asians?
Again, just throwing this out there to test my (weak) grasp of macroeconomic principles.