The Savings Crisis and International Business

This article examines the antecedents of the global financial crisis. The current financial crisis has its origin in the aggregate savings rate of Americans. Since Americans have had a long-term span of negative savings, budget deficit and trade deficit, structural imbalances were created. After the financial crisis precipitated, while the savings rates of households have increased, the spending rate of government increased. Therefore, structural economic imbalances persist. International business can contribute to the understanding of the crisis through the inclusion of cultural variables in understanding the savings rate.