I heard an interesting perspective on Bloomberg recently regarding the new paradigm being taken with low interest rates. Some economist mentioned that the driving factor behind our historically low rates is technological advancement, and that these low rates are here to stay.
His reasoning was that advances in technology drive globalization by improving transportation and communications, in turn allowing companies to develop products in countries with lower interest rates (as well as cheaper production costs). This further enables the development of technology itself, creating a positive feedback loop. He believes rates have reached a new, modern equilibrium to make up for this.
What interests me, however, is the recent rise in the demand for nationalism around the world (namely Germany and its rise of the right wing, UK and Brexit, USA and Trump). It's obvious that slowing technological growth inhibits the movement toward globalization. Do you think the converse is true (can technology continue advancing at this pace with less globalization)? What will this do for interest rates?
Discuss.
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