, Columnist
How a Labor Shortage Could Explain Negative Interest Rates
It’s as plausible as many other theories as an explanation for negative yields.
Trying to stay positive.
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The amount of debt paying a negative yield now stands at a staggering $17 trillion worldwide. This is something that, growing up as an economist, I was told could never happen: An increasingly connected world was supposed to make it easier, not harder, for capital to find a higher return — and besides, negative yields were thought to be impossible.
Clearly this received wisdom was wrong. Yet so is a lot of current thinking about negative interest rates. The problem is not necessarily a surplus of capital, but a shortage of labor.