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Nangle: Everyone Is Looking in the Wrong Place for the Answer to Low Real Rates

How an oversupply of cheap labor may have kept capital costs down
Workers manufacture cotton yarn at a factory in China.

Workers manufacture cotton yarn at a factory in China.

Photographer: Nelson Ching/Bloomberg

Ben Bernanke and Larry Summers recently had a public discussion on global interest rates, which currently are exceptionally low, and whether or not secular stagnation—the idea that slow growth in the developed economies may be here to stay—is the culprit. 

They proved unable to agree on either the cause of, or a solution to, current low real rates.