The rise of American zombies

Fathom Consulting // Insights // The rise of American zombies

We have consistently argued that, by giving unprofitable firms a prolonged lifeline, ultra-loose monetary policy has contributed to weaker productivity growth in recent years. New research from the BIS and OECD supports this view; both organisations have found that the share of firms that are unprofitable, or ‘zombies’, has been rising rapidly across advanced economies. The OECD has said that low interest rates may be one of the causes. But what exactly is a zombie? We answer that question in this note…