Sea change - the end of ZIRP

William W. Priest | Epoch Investment Partners | 19 July 2013

In early 2010, we authored a paper entitled "The Power of Zero.¹" The essence of that paper's argument was based on what happens to a present value equation when the discount rate falls to zero or near zero - the present value of the numerator goes through the roof. Importantly, the longer the "duration" of the numerator, the more powerful the effect as the discount rate falls. And if the numerator is option-like, the rate of change is even greater. As a result, it did...