A depressing consensus prevailed among economists at the recent American Economic Association annual meetings: the developed world is stuck with low growth, low inflation and low interest rates for years to come. Even worse, there is no consensus on why.

Supply and demand for goods and services are basic economic concepts. But when it comes to interpreting shocks to either in the real world, things get murky. Some economists blame prevailing conditions in the industrialised world on flagging supply, others on weak demand.

The supply siders argue that demand in the American economy is robust, propelled by a strong labour market. There is some evidence for this in the US, where unemployment has fallen to 3.5 per cent. The employment-to-population ratio, a measure comparing those employed to the total working-age population, is at its highest level since the dotcom era for those between 25 and 54 years old.