Low interest rates new norm for global economy: Nobel economist Paul Krugman

SINGAPORE (July 20): The world is headed for another decade of low inflation and even lower interest rates, says Nobel-winning economist Paul Krugman.

So, investors holding out for better growth and asset yields had best adjust their expectations to include a new norm of secular stagnation and a potential financial crisis taking place in the near future. He was speaking at the OCBC Global Treasury, Economic and Business Forum on July 14.

Under secular stagnation, growth grinds to a halt and the economy stagnates, with periods of prosperity emerging only when asset bubbles form, Krugman explains.

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