Farewell to Cheap Capital: The Implications of Long-term Global Shifts in Investment and Saving
Research from a new study, Farewell to cheap capital: The implications of long-term global shifts in investment and saving sheds new light on why interest rates fell over the past three decades, and the forces that will influence them in the future. MGI finds that by 2020 half of the world's saving and investment will take place in emerging markets, and there will be a substantial gap between global investment demand and the world's likely saving. If consensus forecasts of global growth are realized, desired global investment will amount to $24 trillion in 2030, compared with $11 trillion today. This will put upward pressure on real interest rates and make capital productivity an increasingly important top management focus.
The presentation will seek to offer a better understanding of the road ahead for interest rates and the implications for company strategy of a world in which capital is more costly.