Professor Philip Lane:

There is a global issue here. Investment rates, in terms of the real or productive economy, have been low in Asia and in the advanced economies. Some of the stories people tell essentially revolve around competition. With the rise of new competitors from the emerging world, it is not super-clear what is the right investment strategy for many corporations. In addition, many activities need less by way of investment because of IT developments. In the context of cloud computing, for example, the cost of establishing a new IT company is a lot less than used to be the case because it is possible to rent storage space in the cloud and so on. There are many different stories with regard to why investment rates have come down. I agree that the fact so much was invested in property reflects some kind of distortion in how the world economy works.