[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"detail-sidebar-cat-0-en-105":3,"doc-seo-202127-105":59,"doc-detail-202127-en":131},{"code":4,"msg":5,"data":6},0,"success",[7,13,18,23,28,33,38,43,48,51,55],{"id":8,"doc_module":4,"doc_module_name":9,"category_name":10,"show_sort_weight":11,"slug":12},1,"Document","Story & Novel",90,"story-novel",{"id":14,"doc_module":4,"doc_module_name":9,"category_name":15,"show_sort_weight":16,"slug":17},2,"Literature",80,"literature",{"id":19,"doc_module":4,"doc_module_name":9,"category_name":20,"show_sort_weight":21,"slug":22},4,"Exam",70,"exam",{"id":24,"doc_module":4,"doc_module_name":9,"category_name":25,"show_sort_weight":26,"slug":27},5,"Comic",60,"comic",{"id":29,"doc_module":4,"doc_module_name":9,"category_name":30,"show_sort_weight":31,"slug":32},6,"Technology",50,"technology",{"id":34,"doc_module":4,"doc_module_name":9,"category_name":35,"show_sort_weight":36,"slug":37},7,"Healthcare",40,"healthcare",{"id":39,"doc_module":4,"doc_module_name":9,"category_name":40,"show_sort_weight":41,"slug":42},8,"Research & Report",30,"research-report",{"id":44,"doc_module":4,"doc_module_name":9,"category_name":45,"show_sort_weight":46,"slug":47},9,"Religion & Spirituality",20,"religion-spirituality",{"id":46,"doc_module":4,"doc_module_name":9,"category_name":49,"show_sort_weight":46,"slug":50},"World Cup","world-cup",{"id":52,"doc_module":4,"doc_module_name":9,"category_name":53,"show_sort_weight":52,"slug":54},10,"Lifestyle","lifestyle",{"id":56,"doc_module":4,"doc_module_name":9,"category_name":57,"show_sort_weight":24,"slug":58},19,"General","general",{"code":4,"msg":60,"data":61},"ok",{"site_id":62,"language":63,"slug":64,"title":65,"keywords":66,"description":67,"schema_data":68,"social_meta":124,"head_meta":126,"extra_data":128,"updated_unix":130},105,"en","accounting-for-macro-finance-trends-market-power-intangibles-and-risk-premia","Accounting for Macro-Finance Trends - Market Power, Intangibles, and Risk Premia","","Real risk-free interest rates have declined over the past three decades while private capital returns stayed stable or rose, widening the gap between public and private returns. At the same time, stock valuation ratios moved up moderately, yet investment remained lackluster despite strong corporate earnings growth and stable or slightly rising profitability. Using an extended neoclassical growth model as an accounting framework, the paper attributes these joint patterns to rising market power, rising unmeasured intangibles, and rising risk premia, beyond savings-supply and productivity-slowdown explanations.",{"@graph":69,"@context":123},[70,84,106],{"@type":71,"itemListElement":72},"BreadcrumbList",[73,77,79,82],{"item":74,"name":75,"@type":76,"position":8},"https://docshare.wps.com","Home","ListItem",{"item":78,"name":9,"@type":76,"position":14},"https://docshare.wps.com/document/",{"item":80,"name":40,"@type":76,"position":81},"https://docshare.wps.com/document/research-report/",3,{"item":83,"name":65,"@type":76,"position":19},"https://docshare.wps.com/document/accounting-for-macro-finance-trends-market-power-intangibles-and-risk-premia/202127/",{"url":83,"name":65,"@type":85,"image":86,"author":91,"headline":65,"publisher":94,"fileFormat":97,"inLanguage":63,"description":67,"dateModified":98,"datePublished":99,"encodingFormat":97,"isAccessibleForFree":100,"interactionStatistic":101},"DigitalDocument",{"url":87,"@type":88,"width":89,"height":90},"https://docshare.wps.com/thumbnails/accounting-for-macro-finance-trends-market-power-intangibles-and-risk-premia/202127.png","ImageObject",300,407,{"name":92,"@type":93},"Emma Mercer","Person",{"url":74,"name":95,"@type":96},"DocShare","Organization","application/pdf","2026-10-30","2026-09-04",true,{"@type":102,"interactionType":103,"userInteractionCount":105},"InteractionCounter",{"@type":104},"ViewAction",11,{"@type":107,"mainEntity":108},"FAQPage",[109,115,119],{"name":110,"@type":111,"acceptedAnswer":112},"What macro-finance trends does the paper document over the last 30 years?","Question",{"text":113,"@type":114},"It documents declining real risk-free interest rates, stable or rising private capital returns, moderately higher valuation ratios, and weak investment, alongside strong corporate earnings growth and stable or slightly rising profitability.","Answer",{"name":116,"@type":111,"acceptedAnswer":117},"Why does the paper consider multiple explanations rather than studying trends separately?",{"text":118,"@type":114},"Studying declines in interest rates or other trends in isolation may miss confounding factors and can lead to implausible implications when other observed patterns must be matched simultaneously.",{"name":120,"@type":111,"acceptedAnswer":121},"What does the paper find as key drivers of the joint developments?",{"text":122,"@type":114},"Rising market power, rising unmeasured intangibles, and rising risk premia play a crucial role beyond traditional explanations such as higher savings supply and technological growth slowdown.","https://schema.org",{"og:url":83,"og:type":125,"og:title":65,"og:site_name":95,"og:description":67},"article",{"robots":127,"canonical":83},"index,follow",{"doc_id":129,"site_id":62},202127,1788542520,{"code":4,"msg":5,"data":132},{"doc_id":129,"user_id":133,"nickname":92,"user_avatar":134,"doc_module":4,"category_id":39,"category_name":40,"doc_title":65,"doc_description":67,"doc_content":135,"file_id":136,"file_url":137,"file_type":138,"file_size":139,"view_count":105,"is_deleted":4,"is_public":8,"is_downloadable":8,"audit_status":8,"page_count":140,"language":141,"language_code":63,"site_id":62,"html_lang":63,"table_of_contents":142,"faqs":143,"seo_title":144,"seo_description":67,"update_tm":130,"read_time":145,"preview_page_count":4},962084925502,"https://ap-avatar.wpscdn.com/davatar_6f874abed73319feea01a86fa6f0fab8","BPEA Conference Drafts, September 13-14, 2018  \nAccounting for Macro-Finance Trends:  \nMarket Power, Intangibles, and Risk Premia  \nEmmanuel Farhi, Harvard University  \nFrançois Gourio, Federal Reserve Bank of Chicago  \nConflict of Interest Disclosure: The authors did not receive financial support from any firm or person for this paper or from any firm or person with a financial or political interest in this paper. They are currently not officers, directors, or board members of any organization with an interest in this paper. No outside party had the right to review this paper before circulation  \nAccounting for Macro-Finance Trends:  \nMarket Power, Intangibles, and Risk Premia􀀃  \nEmmanuel Farhiy and FranÁois Gourioz  \nSeptember 2018  \nConference Draft  \nAbstract  \nReal risk-free interest rates have trended down over the past 30 years. Puzzlingly in light of this decline, (1) the return on private capital has remained stable or even increased, creating an increasing wedge between public and private rates of return; (2) stock market valuation ratios have increased only moderately; (3) investment has been lackluster. We use a simple extension of the neoclassical growth model as an accounting framework to diagnose the nexus of forces that jointly accounts for these developments. We Önd that rising market power, rising unmeasured intangibles, and rising risk premia, play a crucial role, over and above the traditional culprits of increasing savings supply and technological growth slowdown.  \nJEL codes: E34 ,G12 .  \nKeywords: equity premium, investment, proÖtability, price-earnings, valuation ratios, pricedividend, labor share, competition, markups, safe assets.  \n1 Introduction  \nOver the past thirty years, most developed economies have experienced large declines in risk-free interest rates and increases in asset prices such as housing or stock prices, with occasional sudden crashes. Atthe same time, and apart from a short period in the 1990s, economic growth, in particular productivity growth, has been rather disappointing, and investment has been lackluster. Earnings growth of corporations has been strong however, leading in most countries to an increase in the capital share and to stable or slightly rising proÖtability ratios. Making sense of these trends is a major endeavor for macroeconomists and for Önancial economists.  \n􀀃 The views expressed here are those of the authors and do not necessarily represent those of the Federal Reserve Bank of Chicago or the Federal Reserve System. We thank participants in presentations at the Chicago Fed, SED 2017, SAET 2017, NBER SI 2018, and in the Hoover institute conference in honor of John Cochrane, for their comments. We especially thank Stefania díAmico, Marco Bassetto, Bob Barsky, Gadi Barlevy, Je§ Campbell, John Cochrane, Lars Hansen, Monika Piazzesi, Martin Schneider, Sam Schulhofer-Wohl, our discussants Mark Gertler, Dimitris Papanikolaou, and Matthew Rognlie, and the editors Jan Eberly and James Stock for their comments.  \ny Harvard University and NBER; Email: [efarhi@fas.harvard.edu](efarhi@fas.harvard.edu).  \nz Federal Reserve Bank of Chicago; Email: [francois.gourio@chi.frb.org](francois.gourio@chi.frb.org).  \nGiven the complexity of these phenomena, it is tempting to study them in isolation. For instance, a large literature has developed that tries to understand the decline in risk-free interest rates. But studying these trends independently may miss confounding factors or implausible implications. For instance, an aging population leads to higher savings supply which might well explain the decline in interest rates. However, higher savings supply should also reduce proÖtability, and increase both investment and stock prices. Hence, a potential driver that is compelling judged on its ability to explain a single trend, maybe implausible overall, because it makes it harder to account for the other trends.  \nAnother way to highlight these tensions is to note that the stable proÖta","cbCaib6jTrsp8yvb","https://ap.wps.com/l/cbCaib6jTrsp8yvb","pdf",571027,61,"English","# Abstract\n# Keywords\n# Introduction\n## Macro-finance trends over the past thirty years\n## Motivation and approach","[{\"question\":\"What macro-finance trends does the paper document over the last 30 years?\",\"answer\":\"It documents declining real risk-free interest rates, stable or rising private capital returns, moderately higher valuation ratios, and weak investment, alongside strong corporate earnings growth and stable or slightly rising profitability.\"},{\"question\":\"Why does the paper consider multiple explanations rather than studying trends separately?\",\"answer\":\"Studying declines in interest rates or other trends in isolation may miss confounding factors and can lead to implausible implications when other observed patterns must be matched simultaneously.\"},{\"question\":\"What does the paper find as key drivers of the joint developments?\",\"answer\":\"Rising market power, rising unmeasured intangibles, and rising risk premia play a crucial role beyond traditional explanations such as higher savings supply and technological growth slowdown.\"}]","Accounting for Macro-Finance Trends - Market Power, Intangibles, and Risk Premia | PDF",154]