The coming long-run slowdown in corporate profit growth and stock returns [pdf] (2023)

> I show that the decline in interest rates and corporate tax rates over the past three decades accounts for the majority of the period’s exceptional stock market performance.

It's interesting that they've shown this to the exclusion of other narratives, mainly frontier markets like semiconductors and software allowing "easy" creation of value. I think this is partially why investors are so eager to dump so much cash into AI/why Zuckerberg has been so focused on VR/AR—they're looking not just for a solid investment, but an opportunity to get into the rent-seeking class on the ground floor. Why would you invest in a piece of software when you could invest in a "platform" (aka privately-owned market) instead?

Of course, we can't just create these platforms out of nowhere—they require enormous moats like exclusive access to IP or regulatory capture or enormous production capacity or some sort of similar gimmick, and there's only a finite number of these. It seems like this is also a significant reason why growth isn't infinite and should be expected to slow and even reverse in time.

I haven't finished the paper but I eagerly look forward to reading it in full later.

EDIT: spelling, wording, I'm done editing; apologies.

I don't doubt that overall, on average, much growth has come from a 40 year decline in interest rates and a consistent lowering of corporate taxes, but new companies in new industries will continue to be founded and feature explosive growth. We aren't stuck with a static set of companies.

This perspective underplays the role of innovation, globalization, and technological advancements.