Is it different this time?

In practice of course, economies and markets are dynamic with constant change and too much ‘autoregressive thinking’ - merely extrapolating historical trends - can be just as dangerous as overemphasising trivialities. Theorising aside, there are a couple of big changes afoot, one of which investors are underestimating - the nature of the global economy - and the other they may be unaware of - investor behaviour. Hopefully everyone has now realised that the ‘nice decade’, as Mervyn King so quaintly puts it, is now over. What probably isn’t fully understood, and this worryingly includes a n...