Sunday, 23 January 2011

Where will future growth come from?

Not from rising labour inputs in Western economies.

You have been warned......

"Overall, it is apparent that the future global economy will not be able to rely on the kind of demographic inputs that helped fuel growth in the era before the current global recession.

For today's affluent Western economies, the coming demographic challenge of stagnant and aging populations combined with mounting health and pension claims on a shrinking pool of prospective workers is already generating concern, especially in Europe and Japan.

But at the same time, demographic constraints in the rising economies that are expected to fuel future global growth are more serious and intractable than generally recognized."

Nicholas Eberstadt
What Population Growth--and Decline--Means for a Global Economy
Foreign Affairs


Anonymous said...

Is that a polite way that old people aren't productive?

WF said...

Academically polite way of saying we are all fooooked. Young and old alike.

Laban said...

The Japanese are trying to go it alone, and their population is likely to fall. But they'll still all be Japanese, and I don't think their standard of living will take too much of a hit. Income inequality is pretty low there, social cohesion is high. They're still making things that people want to buy, like very high tech medical kit. There's one huge overhanging cloud though - the gigantic Japanese government debt and deficit - mostly owed to its own citizens but will it ever be repaid?

The UK have taken a different route. Getting on for a quarter of primary school children are ethnic minority. The theory seems to be that individuals are just units of production, and that missing (or aborted - one baby in four) British children can be seamlessly replaced by Bangladeshi children.

We'll find out in the next 25 years which of these strategies is the most successful.