Not really following the savings-investment imbalances approach as described in schweser (rdg 23, SS#6)…anyone have a more simplified explanation?
A country’s total investments should equal its savings. If there are more total investments than total savings, there’s a savings deficit and capital must be flowing into the country to fund these investments. Schweser: “In order to attract and keep the capital necessary to compensate for the savings deficit, the domestic currency must increase in value and stay strong” This typically occurs in economic expansions.