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What's Happening In Global Macro?

The Macro Trading Floor

CHAPTER

The Decline of the Real Equilibrium Interest Rate in Europe

The only sustainable shift I could see that makes this really higher real equilibrium interest rate is if we shift more sustainably towards the dominance of capital to the dominance of labor. If you want to onshore back old car factories and all the manufacturer jobs that you have offshore from Europe to Eastern Europe or to Eastern Asia or to anywhere you have well then you're going to have some scarcity of labor problem. That brings back wage bargaining power and it brings back labor over capital which has been one of the reasons why our star and equilibrium real interest rates have also dropped recently honestly thoughIf you listen to the CEOs they are talking about a safer and more diversified offshoring so they're talking about Malaysia

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