U.S. policy makers must revive the country’s export economy as private consumption struggles to recover from the collapse of the real-estate bubble, Yale University’s Stephen Roach told the Handelsblatt newspaper.
Insufficient investment in machines and infrastructure has hurt the competitiveness of U.S. exports and made the economy more dependent on consumption, which makes up about 70 percent of economic growth, Roach said in a guest column.
Private consumption in the second quarter grew at an annualized 1.5 percent in real terms, he said. Consumers are saving and cutting debt and this is “in equal measure logical and rational,” he said.
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