White Papers | 22 March 2017

The Deep Causes of Secular Stagnation and the Rise of Populism

Authors

James Montier

Mr. Montier is a Senior Advisor to GMO, consulting on economic and market research. Prior to joining GMO in 2009, he was co-head of Global Strategy at Société Générale. Mr. Montier is the author of several books including “Behavioural Investing: A Practitioner’s Guide to Applying Behavioural Finance”; “Value Investing: Tools and Techniques for Intelligent Investment”; and “The Little Book of Behavioural Investing.” Mr. Montier is a visiting fellow at the University of Durham and a fellow of the Royal Society of Arts. He holds a BA in Economics from Portsmouth University and an MSc in Economics from Warwick University.

Philip Pilkington

Mr. Pilkington is an economics writer and researcher. He is the author of the book “The Reformation in Economics: A Deconstruction and Reconstruction of Economic Theory” and runs a popular economics blog, “Fixing the Economists.” He has previously contributed to numerous online and print media outlets as a freelance economic journalist. At the time he co-authored this paper, he was a member of GMO’s Asset Allocation team. Mr. Pilkington earned his B.A. in Journalism from the Independent Colleges and his M.A. in Economics from Kingston University.

Executive Summary

In a companion paper, “Six Impossible Things Before Breakfast,” we present evidence that asset markets are generally priced for “secular stagnation,” and argue that this requires a number of extreme assumptions on the part of investors. However, we didn’t really explore the root causes and consequences of secular stagnation in that paper. We remedy that with this paper, which is a deep dive into the murky world of secular stagnation, its sources, and its impact.

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The Deep Causes of Secular Stagnation and the Rise of Populism

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Register for full access to GMO's Research

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