Sentences with phrase «higher nominal growth rate»

Not exact matches

By secular reflation, we mean at least a decade in which short - and long - term interest rates stay habitually below nominal GDP growth and high grade bonds are not really bonds any more: delivering trend returns that are close to zero or even negative.

Finally, in a nominal GDP targeting regime, a decline in r - star caused by slower trend growth automatically leads to a higher rate of trend inflation, providing a larger buffer to respond to economic downturns.

Because nominal wage growth for a large fraction of workers has been held to zero, a somewhat higher rate of inflation would grease the wheels of the labor market by allowing real wages to fall (Akerlof, Dickens, and Perry 1996).

While stocks have a terminal value beyond a 10 - year period, the effects of interest rates and nominal growth on those projections largely cancel out because higher nominal GDP growth over a given 10 - year horizon is correlated with both higher interest rates and generally lower market valuations at the end of that period.

As Bank of Japan governor Haruhiko Kuroda put it: «With the level of nominal interest rates being high, Japan's economy will have more policy room to mitigate the impact of future economic downturns, or will be equipped with a sort of insurance for sustained economic growth.»

It is more accurate to argue that following poor 10 - year returns, provided that valuations are depressed based on normalized earnings and the economy is likely to grow at double digits rates of nominal growth - investors can probably anticipate higher subsequent long - term returns.