Wednesday, February 4, 2015
Secular Stagnation, Debt Overhang, Sluggish Growth, Six Years On
https://www.scribd.com/doc/253529698/Stagnation
Conclusion: There are many plausible reasons why global growth remains relatively sluggish six years after the default of Lehman Brothers. Sorting out the various theories may take another decade or more of data. Indeed, slow growth itself is hardly a fait accompli. There are conflicting signals from markets, with global stock markets seeming to embody high-growth expectations even as global debt markets appear to embody much lower ones, even adjusting for risk, liquidity and safety factors. One reason it is too soon to sort out the alternative viewpoints is simply that the pace of deleveraging remains modest or non-existent in many sectors around the global economy, implying that the debt overhang may still be a significant impediment, even if debt crisis risks have receded for the moment. Thus, exploring ways to continue advancing private sector deleveraging, without excessively eroding the capacity of the public sector to backstop the system and handle catastrophes, remains an important challenge in restoring growth.
tip of the hat to: Secular stagnation, debt overhang and other rationales for sluggish growth, six years on | The Big Picture
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