Can we explain changes in return on equity (ROE)?

Our starting point is the increasing spread between companies’ return on equity (ROE) and risk-free long-term interest rates, which has widened considerably over the past 30 years for OECD countries. We seek to determine the possible explanations for this increase in the excess return on equity: Inertia, given the sharp fall in risk-free long-term interest rates; An actual increase in corporate risk or risk aversion; An increase in the risk-adjusted return on equity requirement. We see that these three explanations are probably relevant. The "ROE anomaly" makes it harder to imagine fairer income distribution, reshoring, investments with long-term horizons, an end to share buybacks, etc.