Asset prices are just numbers. A retirement fund that invests in broad-based stock and bond indices will have returns that track the productivity of the entire economy. If the economy is producing more it means people are consuming more. If it produces less, people are consuming less. It balances out.

An extremely productive economy with 1/5 the number of consumers (and dropping) will have a cheaper stock index, even with improved productivity. Asset prices over the long-term are driven by cashflows. Hollowing out revenue while improving productivity still results in a lower asset price because your cashflows are smaller.

Productivity gains will also be swimming against the stream because scale advantage will deteriorate in all sectors.

> Hollowing out revenue while improving productivity still results in a lower asset price because your cashflows are smaller

And that's fine because it means consumption is lower too.

Ok but good luck saving for retirement when your investments are basically guaranteed a 2% decline every year.