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It's worth noting this is just one person's opinion, it's not an opinion of the Fed itself. The paper analyzes corporate profits on the basis of interest and ta

It's worth noting this is just one person's opinion, it's not an opinion of the Fed itself. The paper analyzes corporate profits on the basis of interest and tax rates alone, but ignores other monumental shifts in global markets over the past few decades like globalized supply chain networks. It's probably true that the efficiency gains from globalization have already passed their peak, but that would have as much of an impact on declines in profit growth rates as any other factor. The article also ignores technology as a factor. If globalization is at its peak, automation is probably still in its infancy. Robotics and AI are rapidly advancing and it's going to have a substantial impact to supply chains and labor markets over the coming decades, regardless of what happens with interest rates.

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iwishiknewlisp 2y ago
> efficiency gains from globalization have already passed their peak Is this true? Aren't there a ton of developing nations that have rapid debelopment that will increase efficiency of different industries as they grow?
- pixelpoet 2y ago
  There aren't a lot of Indonesias left.
  - TheGRS 2y ago
    Sure there are, plenty of low income countries with fledging industries, but the governments get more and more risky to deal with the further down in income you go.
tway_GdBRwW 2y ago
Passing peak globalization might contribute to declining corporate profits from say 2020 onward; not sure that 2020 is peak globalization, but it is in the ballpark. Under standard assumptions of a capitalist economy, a new factor such as "technology" should not drive aggregate higher profits. Because companies don't exist in a vaccuum. Technology may allow a company to produce a good for lower cost, but it also allows that company's competitors to produce the similar good for a similarly lower cost. So of course the article ignored it, it is a non-factor in aggregate corporate profits. So "technology" can increase aggregate wealth of society (I'm a big fan of indoor plumbing) but it is not going to increase AGGREGATE corporate profits. Also, it isn't clear how the specific technology you point towards, "automation", is structurally different from earlier technologies such as i.e. railroads or containerized shipping or telephones or ... Look, obviously only aggregate corporate profits. Some companies made tremendous money off of the "railroad" technology, others went out of business because of it. Likewise, some companies made enormous profits off of computer chips, office software, etc, but the article is about aggregate profits, the economy as a whole, not individual companies.
hnthrow289570 2y ago
>Robotics and AI are rapidly advancing and it's going to have a substantial impact to supply chains and labor markets over the coming decades, regardless of what happens with interest rates. It will be short-lived unless its applied to make necessities as cheaply as possible. Otherwise none of us will have enough money for many luxuries.

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iwishiknewlisp 2y ago

> efficiency gains from globalization have already passed their peak Is this true? Aren't there a ton of developing nations that have rapid debelopment that will increase efficiency of different industries as they grow?

pixelpoet 2y ago
There aren't a lot of Indonesias left.
- TheGRS 2y ago
  Sure there are, plenty of low income countries with fledging industries, but the governments get more and more risky to deal with the further down in income you go.

tway_GdBRwW 2y ago

Passing peak globalization might contribute to declining corporate profits from say 2020 onward; not sure that 2020 is peak globalization, but it is in the ballpark. Under standard assumptions of a capitalist economy, a new factor such as "technology" should not drive aggregate higher profits. Because companies don't exist in a vaccuum. Technology may allow a company to produce a good for lower cost, but it also allows that company's competitors to produce the similar good for a similarly lower cost. So of course the article ignored it, it is a non-factor in aggregate corporate profits. So "technology" can increase aggregate wealth of society (I'm a big fan of indoor plumbing) but it is not going to increase AGGREGATE corporate profits. Also, it isn't clear how the specific technology you point towards, "automation", is structurally different from earlier technologies such as i.e. railroads or containerized shipping or telephones or ... Look, obviously only aggregate corporate profits. Some companies made tremendous money off of the "railroad" technology, others went out of business because of it. Likewise, some companies made enormous profits off of computer chips, office software, etc, but the article is about aggregate profits, the economy as a whole, not individual companies.

hnthrow289570 2y ago

>Robotics and AI are rapidly advancing and it's going to have a substantial impact to supply chains and labor markets over the coming decades, regardless of what happens with interest rates. It will be short-lived unless its applied to make necessities as cheaply as possible. Otherwise none of us will have enough money for many luxuries.