Economics: I am trying to figure out why the very sharp Kenneth Rogoff believes “higher interest rates are here to stay”. (i) I do not understand his allusion to demography. (ii) Inflation really does not look persistent, and it has to be persistent to cause the loss of confidence in central banks that would lead to higher real as well as nominal interest rates being here to stay. (iii) Deglobalization should reduce investment opportunities, and so put not upward but downward pressure on interest rates. (iv) Populist demands for income distribution, the green transition, and increased defense spending contribute through the first factor Rogoff mentions: (v) soaring debt levels. Thus I believe the core of Rogoff’s argument is that governments are about to finally reach the point of having issued so much relatively safe debt to satisfy global demand for assets safer than diversified equities. Maybe he is saying that the market is expecting a rapid runup of U.S. national debt from its current 95% of annual GDP to 140% or so over the next decade to validate interest rates persistently at today’s levels? Certainly the runup from the 80% Trump level to current levels is not enough to do the job—that would require a knife-edge dependence of fundamentals on relative asset quantities we simply do not see:

Kenneth Rogoff: Higher Interest Rates Are Here to Stay <project-syndicate.org/commentary/era-of…>: ‘Interest rates will likely remain higher for the next decade… soaring debt levels, deglobalization, increased defense spending, the green transition, populist demands for income redistribution, and persistent inflation. Even demographic shifts, often cited as a rationale for perpetually low interest rates, may affect developed countries differently as they increase spending to support rapidly aging populations…