In reality, there is corporate underinvestment

We will look at developments in the United States and the euro zone. We believe that since the subprime crisis in 2008-2009, there has in reality been corporate underinvestment, which can be seen from the low level of net investment (once consumption of fixed capital and capital depreciation have been taken into account) and the low growth in net capital. The low level of net investment is surprising when we compare it with the trend in corporate profitability or Tobin’s q (the ratio between companies' market value and economic value). How can this underinvestment situation be explained? Possible explanations are: Corporate concentration, a return of companies with dominant positions; The abnormally high required return on equity; Companies’ determination to deleverage. T his corporate underinvestment is consistent with the observed slowdown in productivity gains.