In 1995, the yield differential in government bonds was 550 basis points. Now it is 55 basis points. Expectations of low future inflation make for a low cost of capital. Today the remaining spreads in long-term rates reflect differences in liquidity of the issues and in creditworthiness of issuers. In such an environment investment activity, that is growth, can thrive.
There is a convergence dividend that comes in various forms. First, think of countries with a history of high long-term interest rates and high government debt. Falling costs for servicing their public debt is the main benefit for those countries. Then, think of countries like Germany, that have long been profiting from a stability culture. For us, the benefit is less obvious.