Low growth, low inflation, low interest rates. What explains the persistence of these conditions in developed economies?
The secular stagnation hypothesis - a world of deficient global demand where the supply of savings exceeds investment demand - offers a most plausible explanation. Moreover, if the hypothesis is correct and the conditions are sustained, then there are serious implications for economic policy and investors.
Attached is the full document that discusses and digs deeper into the secular stagnation hypothesis. The paper is written by Dominic Rossi, Global CIO Equities, Fidelity Worldwide Investment.