New Delhi, Aug. 26 -- A sharp rise in bond yields across key economies like the US, UK, Japan, Germany and France has raised new concerns about the fiscal and financial risks that lie ahead.

A common view is that this bond 'rout' could augur severe disruptions to economic growth and pain for US and global stock markets. But while it is true that yields have risen to levels unseen in almost two decades, the relationship between bond yields, economic growth and stock markets is more complex than this naive view implies.

After all, the recent rise in yields could reflect any number of different and contradictory factors.

Consider some of the obvious ones:

First, higher inflation stemming from supply shocks-renewed protectionism and war-d...