Deutsche Bank Markets Research Global Cross-Discipline Date 12 September 2013 A Nominal Problem Long-Term Asset Return Study Jim Reid Strategist (+44) 20 754-72943 @ Nick Burns, CFA Strategist (+44) 20 754-71970 @ Seb Barker Strategist (+44) 20 754-71344 @ ________________________________________________________________________________________________________________ Deutsche Bank AG/London DISCLOSURES AND ANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX1. MICA(P) 054/04/2013. Deutsche Bank Markets Research Global Cross-Discipline Date 12 September 2013 Long-Term Asset Return Study A Nominal Problem ________________________________________________________________________________________________________________ Deutsche Bank AG/London DISCLOSURES AND ANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1. MICA(P) 054/04/2013. Jim Reid Strategist (+44) 20 754-72943 @ Nick Burns, CFA Strategist (+44) 20 754-71970 @ Seb Barker Strategist (+44) 20 754-71344 @ As we publish this annual report, optimism on global growth is rising and there is also much discussion on the Fed’s plan to taper unconventional ary policy. However,as we highlight, the 5-year moving average of global nominal GDP growth is now at its lowest rate since the 1930s. In the US, which is one of the bright spots globally, nominal GDP growth has been at %, % and % in Q2 ‘13, Q1 ‘13 and Q4 ‘12 respectively. These numbers are lower than where they were in the prior twoquarters (% and %) when ‘QE infinity’ was being formulated and announced. If we had a nominal GDP target we may now be discussing increasing QE and not tapering. Any recovery should be seen in this context. Given the structural issues that we think will continue to hold back growth, unconventional ary policy may actually need to increase in the years ahead. However,given the far superior performance of asset prices relative toeconomic
