Australia in the great secular stagnation

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For seven years now MB and sons has argued that Australia is trapped in a growth straight-jacket, wedged between the need for fiscal consolidation (to protect its bank’s offshore borrowings) and the compulsion by households to save after the GFC shock:

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The double head wind has resulted in sub-standard growth that is obvious to anyone with eyes:

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Not even the largest commodity boom in history was enough to upset this secular trend. Indeed, consider what it would have been without it! But it is not unique to Australia. Indeed, it infects most of the Western world post-GFC, from BofAML on the post-GFC US recovery:

Business investment has been one of the more important weak links to the sluggish recoveries in most advanced economies in the aftermath of the Great Recession of 2009.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.