The “new normal” referred to economic conditions following the 2007-08 recession and became a buzzword in 2010. International Monetary Fund Managing Director Christine Lagarde gave a speech at Georgetown University on October 2, 2014, titled “The Challenge Facing the Global Economy: New Momentum to Overcome a New Mediocre.” Lagarde said:
“The global economy is at an inflection point: it can muddle along with sub-par growth—a ‘new mediocre’; or it can aim for a better path where bold policies would accelerate growth, increase employment, and achieve a ‘new momentum’.”
The “new mediocre” buzzword immediately attracted attention in the financial press.
Wikipedia: New Normal (business)
New Normal is a term in business and economics that refers to financial conditions following the financial crisis of 2007-2008 and the aftermath of the 2008–2012 global recession. The term has since been used in a variety of other contexts to imply that something which was previously abnormal has become commonplace. It has been described as a cliché.
The term arose from the context of cautioning the belief of economists and policy makers that industrial economies would revert to their most recent means post the 2007-2008 financial crisis. The 2010 Per Jacobsson lecture delivered by the head of PIMCO, Mohamed A. El-Erian, was titled “Navigating the New Normal in Industrial Countries”. In the lecture El-Erian stated that “Our use of the term was an attempt to move the discussion beyond the notion that the crisis was a mere flesh wound...instead the crisis cut to the bone. It was the inevitable result of an extraordinary, multiyear period which was anything but normal”.
Wikipedia: Christine Lagarde
Christine Madeleine Odette Lagarde (French: [kʁistin madlɛn ɔdɛt laɡaʁd]; née Lallouette, IPA: [laluɛt]; born 1 January 1956 in Paris) is a French lawyer and Union for a Popular Movement politician who has been the Managing Director (MD) of the International Monetary Fund (IMF) since 5 July 2011. Previously, she held various ministerial posts in the French government: she was Minister of Economic Affairs, Finance and Employment and before that Minister of Agriculture and Fishing and Minister of Trade in the government of Dominique de Villepin. Lagarde was the first woman to become finance minister of a G8 economy, and is the first woman to head the IMF.
International Monetary Fund
The Challenge Facing the Global Economy: New Momentum to Overcome a New Mediocre
By Christine Lagarde
Managing Director, International Monetary Fund
Georgetown University, School of Foreign Service, October 2, 2014
Yes, there is a recovery but as we all know—and can all feel it—the level of growth and jobs is simply not good enough. The world needs to aim higher and try harder, to do it together and be country-specific.
What does that mean? It means a mix of bolder policies to inject a “new momentum” that can overcome this “new mediocre” that clouds the future. That is what I want to discuss with you today.
The global economy is at an inflection point: it can muddle along with sub-par growth—a “new mediocre”; or it can aim for a better path where bold policies would accelerate growth, increase employment, and achieve a “new momentum”.
Lagarde Calls for Bold Global Action to Avoid ‘New Mediocre’
by Sandrine Rastello and Andrew Mayeda
Oct. 2 (Bloomberg)—The global economy needs bold policies to avoid a “new mediocre” period of sluggish growth as the world struggles with a disappointing recovery six years after the financial crisis, the head of the International Monetary Fund said.
“We see continued weakness in the global economy,” IMF Managing Director Christine Lagarde said in a speech today at Georgetown University in Washington. “Countries are still dealing with the legacies of the crisis, including high debt burdens and unemployment.”
‘New’ mediocre era? What about current mediocrity? Global trade has been weak, is weak and will continue to be weak. Nothing new about it.
9:18 AM - 3 Oct 2014
“The new mediocre.” Now that’s a slogan for the age. Like “Don’t do stupid....”
2:14 PM - 9 Oct 2014
The Wall Street Journal
The ‘New Mediocre’
Investors get the growth jitters, but a recession doesn’t seem likely.
Updated Oct. 16, 2014 10:30 p.m. ET
Yet the underlying growth story remains what the International Monetary Fund’s Christine Lagarde called the “new mediocre” at the fund’s Washington meetings on the weekend. The U.S. economy is doing better than Europe and much of Latin America, but that’s a low bar. Employment has been rising but labor participation is still low, wages are flat, and business investment continues to disappoint.
New York (NY) Times
Mired in Mediocrity
By VANESSA FRIEDMAN OCT. 31, 2014
WELCOME to the “new mediocre.” It’s not quite the New Look, or the New Deal, but it is the new normal.
At least according to Christine Lagarde, managing director of the International Monetary Fund, who coined the term a few weeks ago.
She was referring to the global economy, of course, which she thought could use a jolt lest it “muddle along with subpar growth,” but her words, uttered during a relatively small-scale speech at Georgetown University’s School of Foreign Service, have had an impact far beyond the school’s borders and the world of economists (though said economists were very het up about it), reaching into the Twitterverse.
The Wall Street Journal—Video
Christine Lagarde on Europe and the ‘New Mediocre’
International Monetary Fund Director Christine Lagarde discusses with WSJ Editor in Chief about the economic problems facing Europe and what should be done to fix them.
According to Christine Lagarde, managing director of the International Monetary Fund, the new mediocre has become the new normal. (WTF?)
7:12 AM - 5 Dec 2014
New York City • Banking/Finance/Insurance • Wednesday, January 28, 2015 • Permalink