Paul Schemelzing goes back in history to bust Secular Stagnation theory

A history of over 7 centuries has shown that the times as they presently are particularly with respect to the interest rates are not too much different as the people have been led to have a belief, as per a research which has gone as far back as the 14th century.

As per a fact, the climate of the low rates of interest has been a rule mostly than an exception and has indicated that even the rates of interest if negative must not cause any significant aberration and might be there permanently.

A work from Bank of England’s Paul Schmelzing is a counter to the theory of economics which is popular and known as the secular stagnation. This idea has been put forth prominently by the former economist of the White House Larry Summers as it contends that low growth rates along with the environment of low rates are likely to stay the way they are and have been linked with the causes which are not likely to leave anytime soon.

However, by the tracing of these rates back to the year 1311, Schemelzing has found that the situation currently is in congruence with the results which have been there in the course of time.

He recently said that against the context of long-term, the rates which are currently depressed are actually converging back to a trend in the history which makes a point about the secular stagnation environment completely misleading and has suggested that irrespective of the fiscal and monetary responses, the rates may soon enter the territory of negatively being permanent. This has come in the wake of a global debt of $11 trillion which is continuing the carrying of negative yields.

About Lisa Gray

Lisa Gray is one of the experienced team members of our portal with a total experience in writing field of 5 years. Lisa has pursued a Degree in Healthcare Management. She has been the backbone of the entire portal team sharing her work and knowledge with others. Lisa has been a part of this portal since its inception and manages the Health domain right from writing articles to quality check of articles written by members of the team. Lisa, for the portal, scripts down reports, blogs, and articles that entail subjects such as vaccination reports, clinical trials, new drug discoveries, news disease outbreaks & measures, drug approvals, and so on.

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