On capital, saving, and investment in the twenty-first century: a reply to Hein

Abstract

With our book Saving and Investment in the Twenty-First Century: The Great Divergence (published as open access), we present a comprehensive theoretical explanation as well as empirical evidence for the phenomenon of low interest rates observed in the OECD countries and China and make various economic policy recommendations based on it. We have developed a new capital-theoretical approach to address these important issues. In what follows, we will discuss some of the more critical parts of Eckhard Hein’s otherwise very sympathetic review of our book.