Will we restore economic growth?

McKinsey offers up a thoughtful and important analysis of where we might be headed post-pandemic. Critically, restoring broad, strong demand is central to how that story turns out. The last two decades, especially post-2008, has seen weak growth in aggregate demand (compounded in America by progressively weakened competitive pressure to innovate and invest because of in large measure an abandonment of anti-trust enforcement)--the evidence is startling. Even as sovereign and corporate debt ballooned, yields fell to historically low levels. Even junk bonds--what we once called "high-yield" bonds--offer returns of less than 4% recently. There is simply too little demand and thus little incentive for investment that is value-creating (e.g. new factories and innovative products). McKinsey thus wisely links the future trajectory of demand to the challenge of restoring strong productivity growth--which will only emerge with sustained investments in the real economy (versus the financial economy). See its analysis.