Patrick Artus

What accounts for the increase in market capitalisation in OECD countries?

From 1995 to the present, OECD countries’ market capitalisation has increased from 43% to 110% of GDP. We break down this increase in market capitalisation into its different components: The number of listed companies: it is stable; The gap between the long-term interest rate and the growth rate: it has fallen significantly, which is the dominant effect; The equity risk premium: it has risen sharply, which is negative; The increase in corporate profitability due to the skewing of income distribution against employees: it has increased .

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Patrick Artus

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Micaella Feldstein
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