Farewell to Cheap Capital‪?‬

Farewell to cheap capital? The implications of long-term shifts in global investment and
 saving is the latest research by the McKinsey Global Institute (MGI), McKinsey & Company's
 business and economics research arm, on the outlook for global capital markets in the wake of
 the 2008 financial crisis and subsequent recession.

 MGI examines past trends in saving, investment, and capital costs around the world and also
 looks ahead, projecting investment trends and comparing them with plausible saving patterns
 over the next two decades under a number of different scenarios. MGI finds that while a
 three-decade decline in global investment helped drive real interest rates down to their
 precrisis lows, an impending global investment boom may drive rates higher over the next two
 decades.

 These findings have important implications for business executives, financial institutions,
 consumers, investors, and policy makers. MGI explores how these players will have to adapt to
 a world in which capital is more costly and less plentiful, and where most of saving and
 investment occurs in emerging markets. Business models will have to evolve, investors may
 develop new strategies, and government could play an important role in easing the transition.