Significant improvements in technology, particularly ICT and transportation, as well as more sophisticated supply chains are also having a significant impact on production cycles. There are also significant global imbalances in trade and foreign exchange reserves between the mature economies and the new emerging markets such as China, India and Brazil which have resulted in a shift in global economic power and influence.
In US equity markets, for instance, price declines in late 2018 were accompanied by only small downgrades to analysts' expectations for earnings growth over the medium term. This implies that the willingness of investors to pay for earnings declined materially (Graph 3).