Still, investment levels remain insufficient to trigger the kind of sustained acceleration in economic growth that is necessary to meaningfully reduce unemployment and poverty. It is true that low and stable interest rates provide a conducive opportunity for investment, but the issue lies in where these funds are channelled.
While other factors contributed to the low investment rates of earlier decades, it is not difficult to understand why high and volatile inflation can cripple capital formation. Uncertainty about future nominal returns makes a business more reluctant to commit capital, except for the more profitable projects.