Das: The end of growth as we know it

Satyajit Das, the former economist turned consultant to Central Bankers says we better get used to a world with low growth. “Since the 1980’s growth has been driven by debt an financialisation. If you look at the growth in debt since the early 1990’s to 2008, only 15% of it was used to buy productive plant and equipment, which generates real returns.” Whereas 85% was used to buy existing assets or spent on consumption. “We got hooked on this heroin of debt. In the 1950’s you only needed one to two dollars of debt to create one dollar of GDP. By 2007-8 we needed $4 of debt to create one dollar of GDP. In China today you need between $6-8 of debt to create one dollar of GDP. To keep the growth going we’ve got to keep borrowing at ever-increasing rates. 2007-8 was (just) the warning that this model is unsustainable.” To watch the exclusive video with Das please click here: