Is the Era of Easy Money Over?

2min Snip

00:00

Play full episode

Summary

Transcript

Episode notes

Is the era of easy money over? And if it is, should we expect to see more sluggish business cycles and less entrapener ship in the coming years? In the short run, i have a one to two year time horizon. I think for businesses that have been fuelled by high leverage because the cost of funding was so incredibly cheap, they will be exposed. For private equity firms, it's going to put a lot of pressure on their models. Will that have knotn negative consequences for innovation? You can even make an argument that some of the easy money really distorted incentives.

America’s central bank has raised interest rates by three-quarters of a percentage point—its fourth rise this year. It is walking a fine line between cooling the economy and tipping the country into recession. Scientific results fundamental to more than a decade’s-worth of Alzheimer’s research may have been fabricated. For full access to print, digital and audio editions of The Economist, subscribe here www.economist.com/intelligenceoffer