Could a surge in US dividends fuel GDP growth in 2012?

The sheer size of US corporate cash piles could provide a boost to the wider economy this year, according to Capital Economics.

Although firms have been hoarding cash in the face of macroeconomic uncertainty, the forecaster suggested a number of factors that may make 2012 payouts more attractive - adding such increases may be the start of a virtuous circle. The group pointed out US corporate cash reserves have risen from $42bn at the end of the recession in mid-2009 to $672bn at the end of 2011. When short-term investments are included, liquid assets have risen from $1.5trn to $2.2trn over the same period. These figures represent 6% and 19% of total disposable income, respectively, and Capital Economics sugges...