No answers here, only questions.
By "secular stagnation" I mean "declining equilibrium real interest rates".
Most explanations of secular stagnation say it is caused by a rising desire to save and/or a falling investment demand. Call this the "Saving/Investment Hypothesis".
But there are lots of different real interest rates. For example, the real interest rate on Bank of Canada currency is around minus 2%. (That currency pays 0% nominal interest, and the Bank of Canada targets 2% inflation). But people are willing to hold currency, despite that, because it is very liquid. But all assets differ in their liquidity. More liquid assets will have a lower real yield than less liquid assets. And if an asset becomes more liquid over time, its real yield will fall over time.
David Beckworth, JP Koning, and now Steve Williamson, say that falling real interest rates (on bonds and/or stocks) might be due to rising liquidity, (of bonds and/or stocks). Call this the "Liquidity Hypothesis".
One set of data, and two competing hypotheses to explain that data. So we need more data, to try to distinguish between them.
1. Would looking at data on rent/price ratios, for houses, or farmland, help us resolve this question? Because my random Googling suggests that rent/price ratios have generally been falling (prices rising faster than rents), and this is a global trend over the last couple of decades that is consistent with falling equilibrium real interest rates.
2. The US housing market is a recent exception to this general trend. Now the US is not the world, and the market for US farmland seems to be following the global trend of falling rent/price ratios. But we still want to try to explain the exceptions.
3. The equilibrium price P of an acre of land is the present value of the rents. If rents R are rising at rate g, then the implicit interest rate r is given by:
P = R/(r-g) or r = g + R/P (where r and g are either both nominal or both real)
Is it plausible that falling rent/price ratios are due to rising expected growth rates of rents, rather than falling interest rates?
4. Is it plausible that houses and farmland have become more liquid over time, so that the Liquidity Hypothesis can explain falling rent/price ratios too?