More specifically, the US stock market has shrunk by 2.3% since 2018, according to Citigroup strategists led by Robert Buckland, adding to shrinkage in every year since 2011. In the UK, the stock market has shrunk 3% since 2018, meanwhile.

This shrinkage, or de-equitisation, is a result of companies buying more shares than they are issuing.

Why are stock markets shrinking? Here's what's going on:

Buybacks: Companies are spending lots of money on buybacks . Buckland et al say that 3% of the US stock market was redeemed in 2018. Debt is cheap, and equity is expensive. The cost of debt in the US is 4.1%, while the cost of equity is 6.7%, according to Citigroup. In the UK, the contrast is even more striking, with a 4.6 percentage point spread between the cost of equity and the cost of debt. So buying back equity enhances earnings per share , both in reducing the share count and reducing the overall cost of funding.

M&A: There's been a bunch of big-ticket M&A of late, with much of that financed through debt . Think of it this way: Company X is worth $10 million and borrows the money to buy Company Y for $5 million. This, again, leads to de-equitisation, as it reduces the total amount of shares on the public market. (Also, remember, M&A often destroys value .)

IPOs: Private companies are waiting longer to go public (see Uber ), while there's a surplus of venture capital and private equity dry powder, or cash waiting to be invested in private companies. That's meant that the flow of private companies on to the stock market via initial public offerings has slowed in recent years.

Capex: Big companies used to issue equity to finance big capital expenditures, like a new plant or mine. But these investments have

(1) been more muted in recent years, given a weak and volatile global economy following the Great Recession and

(2) been financed with cash flow and/or, debt.