Explanation:
A Pigouvian tax is levied on an activity that generates a negative externality and is set equal to the marginal external damage at the socially optimal quantity, thereby aligning private and social costs.
Explanation:
The global-savings-glut hypothesis, advanced by Ben Bernanke, attributes the low long-term interest rates and large current-account deficits of some countries in the 2000s partly to excess saving in emerging Asia and oil-exporting economies.
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