Economists and policymakers agree on the need to identify the root causes of these trends. This is important not only for understanding the consequences in terms of subdued productivity and falling economic dynamism, but also for designing effective policies to govern them. There is, however, a lack of consensus on the causes underlying these economic developments. At least three conjectures have been put forward.
The first and most popular one is that the labour share is declining and the remuneration to capital remains subdued because, owing to the increasing market power of firms, a larger share of income goes to profits or markups.