Consider the simple aggregate production function: Q = zF(L,K) where Q is output, z is the level of technology, known as Total Factor Productivity (TFP), L is l

Consider the simple aggregate production function: Q = zF(L,K) where Q is output, z is the level of technology, known as Total Factor Productivity (TFP), L is labor, and K is capital. Sustainable economic growth is driven by increases in z, TFP which drives the production function. Government investment in education, R&D, healthcare, and infrastructure increase TFP. There is a serious lack of gov't investment in these areas. In my opinion the share of capital (K) in the equation has grown far beyond what is healthy. Solow posits that capital attracts capital [0]. We have not done enough to offset this natural tendency, and we are seeing the result - huge and constantly growing wealth & income inequality. The economy is growing in an unsustainable fashion. There is a serious lack of "good", sustainable investments in the global economy. One example of this is investor's willingness to pay the Swiss central bank to hold their money for them. Investors are scared - they know a serious revision in value is bound to occur. Many parts of the EU are beginning to flirt with deflation. The top comment mentions negative prime interest rates in Sweden that have not affected the standard of living. This is very interesting given the traditional viewpoint that any form of deflation, however minor, is an economic calamity. Maybe for the central banks it is, as they lose control of one their control over the setting of short term interest which has been their prime monetary policy weapon over choice over the past 30 years. Whatever happens, this is an interesting situation that I'm sure will inform generations to come. [0] http://en.wikipedia.org/wiki/Solow%E2%80%93Swan_model http://en.wikipedia.org/wiki/Solow%E2%80%93Swan_model