Real rates of return on capital have not been generally falling in this century because:

Question

Quizplus · Accepted Answer

Technological progress has shifted the derived demand for capital out, meaning that new technology has increased the productivity of existing capital, leading to higher real rates of return on capital. This has offset the effects of other factors such as inflation, legal restrictions on interest, and government policies on interest rates. Additionally, while capital is subject to diminishing returns in the long run, the effects of technological progress have outweighed this in the short run.

Real Rates of Return on Capital Have Not Been Generally