Researchers from Federal Reserve Bank of Kansas City Detail Findings in Investment (Uninsurable Income Risk and the Welfare Effects of Reducing Global Imbalances): Investment

2025 OCT 08 (NewsRx) -- By a News Reporter-Staff News Editor at Economics Daily Report -- Current study results on Investment have been published. According to news reporting from Kansas City, Missouri, by NewsRx journalists, research stated, “We study the welfare effect of policies that balance net foreign assets when households face uninsurable income risk and borrowing constraints. Subsidizing savings in debtor economies balances net foreign assets and raises the welfare of almost all citizens by increasing world capital and raising wages: in the presence of uninsurable income risk, higher wages create a positive pecuniary externality that raises welfare for low-wealth households.”

Financial supporters for this research include FRPD by Poole College of Management, United States of America, National Science Centre, Poland.

The news correspondents obtained a quote from the research from the Federal Reserve Bank of Kansas City, “The same balancing of net foreign assets is achieved by discouraging savings in lender economies. However, this policy hurts most households by reducing global capital.”

According to the news reporters, the research concluded: “These results suggest that balancing global imbalances may be a positive byproduct of raising investment rates, especially in debtor countries.”

This research has been peer-reviewed.

For more information on this research see: Uninsurable Income Risk and the Welfare Effects of Reducing Global Imbalances. European Economic Review, 2025;179. European Economic Review can be contacted at: Elsevier, Radarweg 29, 1043 Nx Amsterdam, Netherlands. (Elsevier - www.elsevier.com; European Economic Review - http://www.journals.elsevier.com/european-economic-review/)

Our news journalists report that additional information may be obtained by contacting Andrew Glover, Federal Reserve Bank of Kansas City, Kansas City, MO 64198, United States. Additional authors for this research include Ayse Dur and Jacek Rothert.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1016/j.euroecorev.2025.105104. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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