There are plenty of lamentations about how the world is squandering human potential. There are also numerous hand-wringing discussions about negative yields. Rarely, however, does anyone note that these two problems are related: They reflect an imbalance between how well we mobilize human and non-human resources.
I am not suggesting that the shortage of talented labor is the only reason for negative nominal yields. But the negative yields are now so widespread that they can no longer be dismissed as an aberration. It is also noteworthy that the U.S. has the most developed venture capital markets in the world, and it has not yet moved into negative yield territory.
I agree with the notion that negative yields are the result of larger structural forces. That’s precisely why the best way to think about them is not in purely financial terms but as a symptom of the difficulty of finding talent.
Tyler Cowen is a Bloomberg Opinion columnist. He is a professor of economics at George Mason University and writes for the blog Marginal Revolution. His books include “The Complacent Class: The Self-Defeating Quest for the American Dream.”