All the major implications of the gap between the RoE and the risk-free interest rate

In OECD countries, the gap between the return on equity (RoE) and long-term government bond interest rates has widened considerably over the past 30 years. This divergence raises a number of very important questions. 1. What caused it, and does it have a rational explanation? A rise in the corporate risk premium? Corporate concentration and monopoly rents? Simply inert ia in the required RoE? 2. How is it obtained ? Thanks to the skewing of income distribution in favour of earnings; an increase in debt leverage; offshoring; corporate concentration (also one of its causes) ? 3. What are its other consequences (other than those related to its means)? Above all, monetary policy ineffectiveness, as the decline in interest rates has not driven down the required return on capital and therefore has not stimulated investment ; also, a rise in interest rates would be dangerous, as the RoE-interest rate gap has increased corporate debt leverage.