Currently, bond yields in Europe, the United States, and Canada are quite similar and are at low levels not seen in decades. Globalization may have played a role in this convergence, though the channel is not clear. I suspect that the convergence of inflation rates and inflation expectations to common low levels is an important factor.
I will return later to the possibility that globalization has helped lead to low inflation around the world. Other possible contributing factors to low global bond yields include expectations that real activity and investment demand in the major regions will continue to grow at a moderate pace, reduced concerns about shocks to this growth outlook, and large purchases of bonds by Asian central banks.