The characteristics of the global economy in the long term

We believe that the global economy will be characterised in the long term by: Significantly lower potential growth than today, due to weak productivity gains and to population ageing; A weakening of global trade; The return of inflation (due to ageing, a more favourable income distribution for wage earners, the cost of the energy transition and the return to regional value chains); Negative real interest rates, due to the return of inflation and persistently expansionary monetary policy to keep borrowers with high debt ratios solvent; Asset price bubbles caused by the negative real long-term interest rates. These bubbles will be limited only by the eventually excessive level of asset prices relative to income and not by any rise in interest rates.