If that is the cause, bring out the bodies. For this would imply low returns to innovation and low future growth. Falling real rates would instead signal secular stagnation. The pessimists would have it. 42  Hansson and Stuart (1990). 43  There are less optimistic interpretations of this rise in savings, including that it reflects a “savings glut” among in particular emerging market economies (Bernanke (2011), or that is reflects a shortage of supply of safe assets for investors (Caballero (2013)). BIS central bankers’ speeches  9  I want to argue, in a typically two-handed economist way, that both sides of this argument are right. There are good grounds for believing technological forces are driving innovation and hence growth, in a classic Neo-Classical cycle. But there are equally-good grounds for believing sociological forces are retarding growth, in an endogenous-growth pattern. Let me start with the secular innovation side of the argument, the Neo-Classical account. It contends that future growth will be forged in the white heat of a digital revolution. All GPTs take time to reach their melting point.44 Even very rapid, or exponential, rates of technological growth take time to become truly transformative at an economy-wide level. 45 Given past trends, it could take 30–40 years or longer for GPTs to reach critical velocity. That was the case with earlier GPTs, including the steam engine and electricity.

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