If, in fact, economic growth rates are slowing globally for structural reasons, the implications are far-reaching and not much fun to contemplate. Misery notwithstanding, I present three such implications here which may be self-reinforcing. If nothing else, they may illuminate why policymakers, politicians, investors, and academics seem so obsessed with perpetuating positive growth.
Source: Bloomberg and author’s calculations through 3/31/2016. Calculation notes: Earnings Yield is Last 12 months’ index earnings per share / price; forward returns include dividend distributions but no reinvestment. Averages are simple arithmetic averages.