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. the second, more benign conjecture is that the factorless income share is actually remunerating – rising, but unmeasured – investment flows, which may include intangible assets and organisational capital. the third possibility is that variation in the factorless income share is attributable to the differences between the true rental cost of capital, which firms pay when making production and investment decisions, and the standard estimates of this cost, such as those based on the return on risk - free bonds. but how relevant are these explanations? which explanation is the most important empirically? 1 / 3 bis central bankers'speeches in what is perhaps one of the most enlightening studies on the causes of the declining labour share3, loukas and his co - author present a unified empirical exploration of these three explanations through the lens of the long - term path of the economy. using us data, they find that the decline in labour income shares and the low capital remuneration do not reflect an increase in profits, and that declining competition or increasing market power are inconsistent with the data on labour income. this finding is important, as declining competition had been the most popular explanation until their paper was released. recent research conducted at the ecb4 reaches the same conclusion for europe. the authors find that in europe mark - ups have decreased if anything and market concentration has been stable over the last decade. therefore, increasing market power cannot be the reason behind the decline in the labour share in europe. loukas and his co - author also find the second explanation difficult to reconcile with the data, as investment spending on unmeasured capital would need to be implausibly large to account for factorless income. it is the third potential explanation that turns out to be the most promising. even if further research is needed to understand why simple measures of the rental cost of capital deviate from the rental cost that firms internalise when making their investment decisions,

and outstanding amounts for all kinds of securities. however, the quality management for this database, which is provided by secondly, the ecb could support ongoing market initiatives to improve transparency by offering its expertise in the international standardisation of definitions and classifications ( looking, for instance, at how to define a covered bond, a mortgage prepayment rate or the residency of a bond issuer or holder, or considering ways of consistently classifying counterparties ). this could include dialogue with the financial industry in the context of the possible enhancement – under consideration by the european commission – of the supervisory disclosure requirements under the so - called pillar 3 of the capital requirements directive so that the information to be disclosed is based on clear definitions and reported in a standard format and with sufficient frequency and timeliness. thirdly, as regards the short - term european paper market, the ecb is also involved in the actual compilation and publication of relevant statistics, and such transparency may come at a premium in the current circumstances. in general, more statistical data may be collected by ncbs on an ad hoc basis, from selected key players, for instance in relation to particular types of financial innovation. i also invite the stc to contribute to the enhancement of the financial literacy of euro area citizens and to further improve the accessibility of its statistics for specific target groups. conclusions european policy - makers need to have at their disposal a wide array of timely, high - quality statistics on which to base their decisions. the availability and quality of genuine euro area statistics – i. e. those which are more than just the sum of the national data of the member states – has improved very substantially over the last ten years. most notably, the ecb and eurostat now regularly and jointly release quarterly real and financial euro area accounts that are both integrated and comprehensive. and yet, i would strongly favour an improvement in the timeliness of such releases, which would then be even more useful for the ecb ’ s monetary policy - making. the credibility of euro area and relevant national statistics is of key importance to the ecb, and this also requires that such statistics be effectively communicated. this applies in particular to the hicp. in view of the importance to the ecb of euro area monetary, financial and external statistics, the governing council has endorsed a strategic vision that should further increase the effectiveness and efficiency of the compilation of these statistics by the eurosystem. this entails even more intensive cooperation not only among the statistics departments of the ncbs and