Monday, October 26, 2015

Paul Krugman Offers His Explanation For Weak Global Economy

Krugman's argument is rather simple.  Emerging markets borrowed in dollars and didn't invest the funds well. Consequently, the flow of funds from investors has shifted from emerging markets to developed economies.  The developed economies have not responded to the flow of capital and low interest rates by making productive investments.  Secular stagnation is the outcome when interest rates close to zero do not stimulate investment.

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