We understand the effect our lifestyle choices have on the health outcomes we achieve, even if this knowledge does not motivate us to go to the gym. But while we are adept at understanding the costs and benefits of health trade-offs in our personal lives  —nothing like a pandemic to turn everyone into an instant health expert — the long-term effect on our investments of the financial “lifestyle” choices various economies make can be obscured by prevailing narratives such as “deficits don’t matter” and “inflation is transient”. 

In the financial world central banks and governments are continuously making “lifestyle” choices at the macro level in the form of monetary and fiscal policy. For more than a decade we have been living in a world awash in excess liquidity fuelled by low interest rates and low inflation. Highly accommodative monetary policy was a “lifestyle choice” for many advanced economies, to stimulate weak economies at a time when it was needed. However, in economic...

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