The Age of Stagnation: Why Perpetual Growth Is Unattainable and the Global Economy Is in Peril

by Satyajit Das

Overview

The global economy is entering an era of protracted stagnation, similar to what Japan has experienced for over a decade.That is the message of this brilliant and controversial summary of our current economic predicament from an internationally respected consultant and commentator on financial markets, who predicted the Global Financial Crisis of 2008. The author challenges the assumption that growth can be perpetual and questions the ability of political leaders to enact the tough structural changes needed. He is particularly critical of the "easy money" approach to dealing with the great recession of 2008, citing the dangers of excessive debt and deep-seated fundamental imbalances. The fallout of these poor policies, he argues, will affect not only the business sector, but also the lifestyles and prosperity of average citizens and future generations. The author concludes with a thought experiment illustrating the large-scale changes that will be necessary to restore economic, financial, and social sustainability. This experiment has already been tried in Iceland, which went bankrupt in the wake of the 2008 crisis, and now, after a painful adjustment, is on the road to recovery. Written for the lay reader and peppered with witty anecdotes, this immensely readable book clearly explains the missteps that created the current dilemma, why a recovery has proved elusive, and the difficult remedies that must eventually be applied to ensure a stable future.

Product Details

ISBN-13:	9781633881594
Publisher:	Rowman & Littlefield Publishers, Inc.
Publication date:	02/09/2016
Sold by:	Barnes & Noble
Format:	eBook
Pages:	347
File size:	1 MB

About the Author

Satyajit Das is an internationally respected expert in finance, with over 35 years’ experience. In 2014, Bloomberg nominated him as one of the fifty most influential financial thinkers in the world. He has worked for CitiGroup, Merrill Lynch, and the TNT Group and acted as a consultant advising banks, investors, corporations, and central banks throughout the world. He is the author of Extreme Money: The Masters of the Universe and the Cult of Risk and Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives. Featured in Charles Ferguson’s 2010 Oscar Award-winning documentary Inside Job and the 2012 PBS Frontline series Money, Power & Wall Street, Das contributes to the Financial Times and the Wall Street Journal’s Marketwatch among other publications.

Table of Contents

Prologue: Reality Bites 1

1 Great Expectations: Postwar Booms and Busts 9

2 Borrowed Times: Causes of the Global Financial Crisis and the Great Recession 33

3 Escape Velocity: The Power and Impotence of Economic policies 62

4 The End of Growth: The factors Driving Secular Stagnation and the New Mediocre 93

5 Running on Empty: The Resource and Environmental Constraints on Growth 120

6 Circling the Wagons: Globalization in Reverse 148

7 Bric(S) to Biits: The Rise and Fail of Emerging Markets 174

8 Economic Apartheid: The Impact of Rising Inequality on Growth 203

9 The End of Trust: How a Democracy Deficit Harms Economic Activity 230

10 Collateral Damage: The Fallout for Ordinary Lives 258

Epilogue: Final Orders 282

Notes 298

Acknowledgments 310

Selected Further Reading 311

Index 317

About the Author 337

Editorial Reviews

12/07/2015
Das, selected by Bloomberg Markets as one of the 50 most influential financial thinkers, provides an accessible and deeply alarming look at the current world economy and anticipated future downward trends. After a concise summary of the post-WWII era, which he terms “the New Gilded Age,” Das reviews the 2007 financial crisis, providing a perspective that will be useful even for well-informed readers. He feels that the financial meltdown was a crisis that went to waste: “weary policymakers” dismissed the very real risks of further trouble, such as those posed by additional crises in emerging markets such as Brazil, India, and Turkey. Chapters of depressing information are leavened by some wry humor; for example, Das pokes fun at people who pretend to have read Thomas Piketty’s Capital in the Twenty-First Century. But perhaps the only thing more disheartening than his forecasts is his prescription for the bitter medicine he feels is needed to forestall disaster—political nonstarters such as population control and rationed electricity consumption—which makes this important volume more valuable as an issue spotter than a road map. Agent: Andrew Stuart, Stuart Literary Agency. (Feb.)

Publishers Weekly

"Loved it! Written with passion and insight, and laden with facts, the book provides a clear explanation of the economic, social, and political issues that lie ahead, and the difficulty in solving them. Essential reading for the investor who wants to be informed and ahead of the curve.” —Jon Markman, Forbes columnist and president and publisher of Markman Capital Insight “Growth or, rather, the lack of it is a key issue of our times. The Age of Stagnation provides a penetrating analysis of how a combination of the aftereffects of the Great Recession and deep-seated structural factors now cast a long shadow over the future. Highly accessible and written with wit and style, this provocative and important book deserves to be widely read.” —Nouriel Roubini, professor, New York University's Stern School of Business, and chairman, Roubini Global Economics “The Age of Stagnation is an elegant and informative discussion of the economic and social factors that have led us to the ‘new normal'—a state of low growth, soaring debt, and rising political tensions. Even if you disagree with the author's dystopian vision of the future of the global economy, this important book challenges the false narrative in the media and in political circles regarding the causes of the Global Financial Crisis of 2008.” —Christopher Whalen, head of research, Kroll Bond Rating Agency, and author of Inflated: How Money and Debt Built the American Dream “In The Age of Stagnation, Satyajit Das exposes in masterful clarity the extent to which the global economy careens toward catastrophe while its leaders exude a mix of denial and impotence. The current environment of zero-cost money, concentrated bank power, and anemic productive growth has coalesced not by accident or economic cycle but by willful choice. Developed countries are laden with more than 100 percent debt-to-GDP ratios and inadequate savings levels, while developing countries are being crushed by greater debt, currency wars, internal and external inequality, and unfettered speculative finance. Das warns, with passion and illuminating evidence, that without significant change, the only possible future holds dire consequences for all but an elite few. His tone is as urgent as the problem. All central bankers, politicians, and citizens should heed his words.” —Nomi Prins, author of All the Presidents' Bankers “Satyajit Das was among the first to foresee the 2008 market crash, and he has been one of the sharpest analysts of the current confusions of the European project. Now, in The Age of Stagnation, he focuses on the diminishing prospects of the global economy. His writing is always vivid and clear, but he delivers a hard message that deserves a wide audience.” —Charles R. Morris, author, The Trillion Dollar Meltdown

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