The world economy looks to be transitioning to a more difficult era where interest rates will be higher, geopolitical tensions greater and uncertainties more pronounced.
That’s the message that emanated from this year’s annual meeting of the American Economic Association in New Orleans. Economic luminaries — including former U.S. Treasury Secretary Lawrence Summers, ex-International Monetary Fund chief economist Kenneth Rogoff and former Bank of England policymaker Kristin Forbes — warned of perils ahead.
On the way out is an era of ultralow interest rates and rapid Chinese growth. Investors and policymakers will instead confront a new world in which an intensifying U.S.-China rivalry and dangerous debt blow-ups are more the norm.