Business investment in emerging markets has outpaced investment in advanced economies by a wide margin. We have secular stagnation in advanced economies which discourages investment even when interest rates are very low. Many large corporations are using their cash to buyback their stock or by paying higher dividends. Apparently, they do not see a better way to reward their shareholders.
One of the problems with this picture is that growth in many emerging markets has been dependent upon exports to advanced economies. Falling demand for imports in advanced economies has led to slower growth in many emerging markets.
No comments:
Post a Comment