Since the financial crisis, growth has taken a dramatic leg down. We see a couple of reasons for that. One is that there is a demographic trend at work where, in Europe, the U.S. and particularly Japan, populations are getting older, and as populations age, consumption declines. Productivity has also plummeted, and that's slowing growth. We also think that the significant amount of inequality in the global economy is a contributor.
Central banks have been trying to stimulate growth to make sure that we get out of this rut. When you think about central bank policy today, the G-10 countries [Belgium, Canada, France, Germany, Italy, Japan, the Netherlands, Sweden, Switzerland, the U.K. and the U.S.] have issued about $34 trillion worth of sovereign debt. But about 35% of that carries a negative yield today, more than 70% is below 1%, and more than 90% is under 2%. It's so different from anything we have experienced in our lives in the fixed-income world. And those sovereign rates really set yields and valuations for all kinds of fixed-income securities.
The question is, can the Federal Reserve or the ECB (European Central Bank) or the Bank of Japan really do enough to push the needle higher on growth? We would argue that's not going to be the case. And that leads to the question of the efficacy of central bank policy, which is raising a whole host of issues, such as whether fiscal easing is the next step for some countries.