Carlyle examines how the global economy is entering a “post-normal” phase characterized by higher equilibrium interest rates, shifting capital flows, and uneven productivity gains from AI. The report argues that investors must adapt to a world where fiscal dominance and supply constraints shape inflation dynamics more than central banks.
Through the Looking Glass
Carlyle
Jason Thomas, Jason Levy
Research
23 Pages
Key Takeaways
Fiscal dominance: Government spending now drives over 70% of U.S. GDP variance, making policy cycles less effective.
Higher neutral rate: Real equilibrium rates may settle near 1.5%, up from the pre-pandemic 0%, changing asset valuations.
AI productivity gap: Early adopters show 30–40% faster efficiency gains, widening disparities across sectors and economies.
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