Wed. Dec 8th, 2021

Former Treasury Secretary Larry Summers, who has repeatedly criticized loose central bank policies and has forcefully sounded the alarm on the upside risks of the current bout of inflation, has warned that global financial markets seem to be pricing in slow growth and low real interest rates for the next several years. “The stimulus that we’ve enacted is 5 to 10 times—depending on how you do the calculation—as large as the fiscal stimulus enacted after the [2008] financial crisis,” Summers said in a Nov. 10 lecture hosted by the London School of Economics (LSE). “Currently, the driving event is the extraordinary scale of the fiscal stimulus, along with extraordinary monetary policy, that has been put in place,” he said, adding that, “what markets are seeming to price is a return to secular stagnation, or another way to put it is … Japanization.” Secular stagnation is a period of little or no …

Author: Tom Ozimek

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