Based on this cryptic note at Maxspeak:
P.S. The dog that didn't bark. Nothing on this from Vox, Baby.And this generous comment at AngryBear:
Greg might have given a citation to Andrew Samwick for this:
If the dividend yield is approximately irrelevant, as Modigliani and Miller tell us, then it is easy to imagine that it could undergo a major change in the years to come. Looking ahead, it seems plausible to me that dividend payouts broadly construed could rise significantly. If we are about to experience a period of slower economic growth because of demographic change, then firms might well have fewer profitable investment opportunities and, as a result, may decide to pay out a larger percentage of their earnings.
It seems like PGL should take Max for a walk to the dog pound.
I'm sure that for those inside the beltway, the Baker-DeLong-Krugman presentation at Brookings, along with the Mankiw comments, was big news. The crux of the matter is simply that the projections of future stock returns can be reconciled with the low economic growth rate in some models only if U.S. corporations do something other than reinvest a large chunk of their earnings domestically. I posted about this issue about two months ago, and subject to minor adjustments, that original post still represents my basic viewpoint. In the absence of additional knowledge and insights, I offer no additional posts.
Elsewhere in the blogosphere, Scrivener raises some interesting points about what happens to bond returns as stock returns fall relative to their historical values. Dean offers some followup comments over at MaxSpeak, and Brad offers some brief comments on his blog. To quote the MinuteMan, "[T]he intellectual ball seems to be advancing."
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