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Bullish investors like to argue that global equity markets can't fall much because it's still too early in the market cycle. Their confidence is likely misplaced.

A growing consensus of economic heavyweights – joined this weekend by Paul Krugman of Princeton – suggest the economic and market patterns that have held true since the Second World War no longer apply. This time around, a recession may not be followed by a vigorous recovery.

In their view, the past five years have been merely the reanimated corpse of the last business cycle. Through its easy-money policies, the U.S. Federal Reserve is providing the zombie virus that keeps the economy shuffling forward, but it hasn't succeeded in starting a new cycle of expansion.

In a blog post on Saturday, Prof. Krugman uses as his starting point a recent presentation from Larry Summers, the Harvard economist and former U.S. Treasury secretary, that argues the current slow pace of economic growth may not be temporary. If Prof. Summers is correct in assuming that slow growth has become the new normal, "we may be an economy that needs [financial] bubbles just to achieve something near full employment," Prof. Krugman says.

A similarly downbeat notion comes from Ray Dalio of Bridgewater Associates, who gained fame by deftly piloting his hedge fund through the financial crisis. In his video "How the Economic Machine Works," Mr. Dalio distinguishes between the short-term debt cycle that lies behind the normal recession-and-recovery pattern and the long-term debt cycle that creates much bigger fluctuations.

Mr. Dalio believes North America is dealing with the end of a long-term debt cycle for the first time since the 1930s. A long-term cycle typically lasts 75 to 100 years and rolls over when aggregate debt, after rising faster than incomes for a prolonged period, can no longer be repaid.

The resulting process is a decade or more of default, restructuring, lower spending, wealth redistribution and asset price declines offset by government spending. The process of "deleveraging," or reducing debt, only ends after incomes rise faster than the rate of inflation long enough for total debt levels to decline significantly.

If Prof. Krugman and Mr. Dalio are right, we are not at the beginning or middle of a typical postwar economic recovery. Our credit-addicted economy is now confronted with major structural issues – excess debt, an aging population and the deflationary effects of technology – that will put a brake on earnings growth for a long period.

To be sure, if a sustained bull market is not in the cards, a market catastrophe isn't assured either. Central banks can use monetary policy to balance inflationary and deflationary forces in an attempt to engineer what Mr. Dalio terms "a beautiful deleveraging."

The most likely outcome is a choppy, flattish market. Dividends, even small ones, will be attractive and any company capable of generating substantial earnings growth will trade at a premium. Less cyclical industry sectors such as health-care providers, well-managed consumer staples companies and utilities are likely to outperform. So are sectors – such as the mobile Internet – that appear able to expand no matter what the overall economy does.

Investors should avoid any investment advice that begins, "at this stage of the cycle, this sector or that sector outperforms." This is not a normal postwar economic cycle. If we're not in uncharted waters, the only useful maps are old and dusty.

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