Has business fixed investment really been unusually low over the past 20 years? Chicago Fed economist Francois Gourio explains that based on recent data revisions, investment has not been low relative to gross domestic product, though it may still have been somewhat low relative to profits or to the stock market.

What is driving the return spread between “safe” and “risky” assets? Low interest rates should have stimulated investment, leading to an economic expansion until the return on capital was as low as the safe interest rate. This did not happen. Why not? Senior economist Francois Gourio and his coauthor consider four potential causes.