I’m not here to champion Alan Greenspan, but the “Asian saving” story rings true to me, if only as the symbol of a larger “demographic transition” story. The demographic transition seems extremely significant to me, economically, and I don’t see many persuasive arguments otherwise, largely because I see few arguments period. Demographers love to talk about it, but the silence among economists, particularly Austrian economists, can be deafening.

What does Austrian business cycle theory say about a rapidly aging population with unprecedented life expectancy and unprecedented expectations for retirement? Won’t all of these would be retirees, and pension funds and other institutions representing them, drive down interest rates? Why would these low interest rates not have effects similar to a central banker driving down rates similarly?

How does the market necessarily coordinate all of these unprecedented desires to defer consumption with future production? Maybe too many people trying to defer too much consumption just creates a bubble that bursts long before the unprecedented lot of old people reach retirement age.

Simple stories generally don’t impress me, so I’m not suggesting that the demographic transition story is the one, true account of “the crisis” or that central bank policy and state policy more generally is blameless. These effects interact.