07 June 2016 at 1:33 GMT
The Wall Street Journal
One of the great mysteries of the recovery is why low interest rates have done so little to lift business investment. After all, that is supposed to be one of the ways monetary policy works: A lower cost of capital makes any project more viable. But what if lower interest rates are actually hurting investment by encouraging companies to pay dividends or buy back stock instead? That’s the theory advanced by economist Jason Thomas of private-equity giant Carlyle Group. It is at odds with conventional economics but has some intuitively appealing logic and supportive data.
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