Market interest rates must rise in order to maintain equilibrium between the demand for investment funds, which increases, and the supply of investment funds. And, indeed, we have seen that market interest rates, particularly for corporate issuers, have risen steadily for the last year or so.
This somewhat abstract description of the effects of a step-up in the growth rate of technical change bears a striking resemblance to the developments in labor markets, prices of goods and services, capital investments, and fixed-income markets of recent years. But there’s still an element missing. How does the performance of the stock market in recent years fit into this picture?