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How do profits grow 8% if the economy grows 3%. It does seem counterintuitive.

This is the best answer I've seen: https://economics.stackexchange.com/a/21617/7263



They predicted that companies will be able to extract more value from workers in the future. In other words, they think that the top 1% will continue to get relatively richer at a faster rate, as long as that is true profits can improve without the economy improving.


That just means the economy will continue to grow, it doesn't specify how the stock market can grow faster than the economy.


The 2% economic growth rate is an average. It might be the case that the average worker's real wage grows 0% (this is basically true [1]), while corporate profits, which make up ~10% of the U.S. economy [2], grow 20%/year.

[1] https://en.wikipedia.org/wiki/Real_wages#/media/File:United_...

[2] https://fred.stlouisfed.org/graph/?g=1Pik




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