Saturday 10 December 2016

We face into global economic uncertainty as populations age and investment grinds to a halt

Published 20/08/2016 | 02:30

Pedestrians walk past a man sitting on the sidewalk holding a sign on Wall Street near the New York Stock Exchange (NYSE) in New York Photo: Bloomberg
Pedestrians walk past a man sitting on the sidewalk holding a sign on Wall Street near the New York Stock Exchange (NYSE) in New York Photo: Bloomberg

Interest rates are low, so it should be attractive for companies to borrow to invest in new products and markets. But American companies are not doing so to the extent we hoped for. Instead, they are spending about $500bn every year buying back their own shares.

  • Go To

Share buy-backs keep up the value of their shares, which is good for their shareholders. But they are not all that beneficial to the economy, in so far as they reward holders of financial assets without creating new job opportunities through investment. They also may increase inequality in US society, because shareholders tend to be better off than the average citizen.

But do the companies have a real choice here?

Please sign in or register with Independent.ie for free access to Opinions.

Sign In

Read More

Don't Miss

Editor's Choice