when productivity fails to grow significantly gains in wages corporate profits and living standards are limited 
investment in an economy is equal to the level of savings because investments are financed from savings low savings rates can lead to lower investment rates and lower growth rates for labor productivity and real wages when savings rates in the u s are low it is viewed as harming productivity growth in the future a big question is what role quantitative easing and zero interest rate policies zirp have played in encouraging consumption at the expense of saving and investment for instance during periods of lax monetary policy where credit is accessible and affordable consumers are more likely to incur debt and decrease their savings in pursuit of mortgages loans and other major purchases it is only when monetary policy is tightened and rates rise that the economy encourages saving and ultimately future investment productivity is largely determined by the technologies available and management s willingness and know how to improve processes companies can choose to spend money on short term investments and share buybacks rather than investing in long term capital some economists call for corporate tax reform to better incentivize investment in manufacturing infrastructure or long term assets in the wake of the covid 19 pandemic some economists believe that workers have been focusing more on higher value tasks that rely on technology mobility and scalability as more businesses shift away from strictly on premises operations alternative infrastructure investments are needed to handle a hybrid or fully remote entity 