We were delighted to host the event "The Global Balance Sheet Has Tripled Over the Past 20 Years – Should We Be Worried?" on December 1, 2021. In new research, the McKinsey Global Institute has built a balance sheet across corporate, public, household, and financial sectors. The findings raise important questions about the health and resilience of the global economy and capital allocation.
Although economies have become digital and investment in intangible assets has risen strongly, brick and mortar make up a much larger share of net worth than assets that typically drive productivity and growth. Moreover, asset values have tripled over the past decade and are now far higher than long-run averages. Individual countries have experienced this before- until a price correction typically turns into a financial crisis; this time around, the pattern seems globally synchronous.
While higher net worth is usually taken as a sign of prosperity, should we be worried about these developments? This online event discussed how countries and companies can adjust to the apparent disconnect between wealth and GDP, find 21st century stores of value, and address growing financial imbalances that will determine the future course of the global economy.