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I am thinking about this but i couldn't come up with anything.
Then why don't you enroll in Economics courses at your local university?
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Originally Posted by J.Thomas
Back in the day there were recessions too but economy always jumped better and stronger.
Uh-huh,....so that's why you had Recessions in 1925, 1928, 1930, 1933, 1937, 1946, 1949, plus three Recessions during Eisenhower's 8 years with the 3rd and final Recession ending in 1961?
It could be argued you never fully recovered from the Clinton Recession in 2000.
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Originally Posted by J.Thomas
Do you think overall global economy will ever grow like 4-5%??
Of course, it will, as more developing- and emerging-States start moving into the 2nd Level Economy.
Good for them; bad for you.
Quote:
Originally Posted by J.Thomas
Will US, EU, Japan or other developed countries grow 5%??
No.
Quote:
Originally Posted by J.Thomas
I really have no idea
Then look at the data for the US:
2000-2010 Year 1.68%
1990-2010 Year 2.55%
1980-2010 Year 2.79%
1970-2010 Year 2.89%
1960-2010 Year 3.16%
Do you think overall global economy will ever grow like 4-5%??
Will US, EU, Japan or other developed countries grow 5%??
Growth is fueled by two things: an increase in the population and an increase in productivity. The world's population has exploded that last 100 years but that is not likely to continue at the same rate. Most demographers are projecting a substantial slowdown in population growth over the next 50 years.
Many developed nations already have a problem with shrinking populations and only can maintain GDP growth goals through lax immigration policies. The source of all the migrants is the undeveloped nations. The developed countries have the technology and infrastructure to foster a growth in productivity, but not the manpower. The under-developed nations are in the opposite boat - not sufficient infrastructure but plenty of manpower. Eventually that will change, but it is likely that as productivity shifts to the under-developed nations, that populations there will also shrink; that has been the trend everywhere else in the world. Once that pool of manpower shrinks, that is it, there are no more pools of people to fuel the economy.
As population growth slows down, the question is, can an increase in productivity growth make up for that? That really cannot be answered by looking at historical data and it is anybody's guess what the answer is, but my personal belief is that it cannot and the primary reason is resource constraints. Water, clean energy, rare earth minerals, (to name a few) are all resources that are significantly strained. This is not surprising as economic growth is by its nature an exponential process. Basic math tells us that any exponential process ends up blowing up. It is just not sustainable forever.
Back to your questions: It is likely there will be short stints of global growth in the 4-5% range but I doubt that it will be sustainable and the further we go into the future, the less likely I think it will be. As to the US - similar answer but shorter time line. It will depend critically on our immigration policies. If those are lax and we import the third world into the US, I think our apogee of economic power will be in maybe 30 years and we will have periods of 4-5% GDP growth. It we tighten immigration policy our height of economic power will be much sooner. Obviously there are deep political issues here.
Last edited by TwoByFour; 02-10-2016 at 05:39 PM..
Growth is fueled by two things: an increase in the population and an increase in productivity.
Quite true. Productivity is driven by investment in technology, and production eventually depends on the gains in productivity being shared with consumers. Else they can't buy, and production and investment fall.
For the last 40 years in the US anyway, the oligarchs have siphoned off nearly all the productivity gains for themselves, and the depressed consumer buying power was boosted by escalating debt. This hit a major crisis in 2008, as all unsustainable practices eventually do. Since then absolutely nothing has been done to alter the situation. Rather it's been made worse by things like QE.
So the real question is whether the oligarchs will wish to stop sucking the world dry like leaches, or put the world back on a sustainable high-growth path, which will necessarily require them to take a smaller share. It doesn't appear that they wish to do that. And consumer-capitalism may well be obsolete before they have to.
This is all part of the normal business cycle. Right now, the world economy is slowing and we need some time to allow demand to catch up to supply before prices again will spike and the economy will take off again.
I have worked for years for an engineering company that deals with large industrial projects particularly oil and gas and mining. Currently the prices are too low for there to be any new large scale projects so there needs to be some weaker companies going under and the higher cost suppliers to go out of business before prices will rise to fund the next wave of development...in my opinion, that's probably not till 2019 or 2020.
Some companies and industries are thriving with the cheap oil and commodity prices but the high value of the US dollar is another impediment for US exporters....great to buy foreign stuff now though.
This is all part of the normal business cycle. Right now, the world economy is slowing and we need some time to allow demand to catch up to supply before prices again will spike and the economy will take off again.
I'm all for give the cash cow a shot in the rear with upwards pressure on wages.
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Originally Posted by Tall Traveler
I have worked for years for an engineering company that deals with large industrial projects particularly oil and gas and mining. Currently the prices are too low for there to be any new large scale projects so there needs to be some weaker companies going under and the higher cost suppliers to go out of business before prices will rise to fund the next wave of development...in my opinion, that's probably not till 2019 or 2020.
Deeper than the we need a debt clearing event.
Quote:
Originally Posted by Tall Traveler
Some companies and industries are thriving with the cheap oil and commodity prices but the high value of the US dollar is another impediment for US exporters....great to buy foreign stuff now though.
Right now, the world economy is slowing and we need some time to allow demand to catch up to supply before prices again will spike and the economy will take off again.
Demand = People with money to spend. In the US, per capita GDP has risen about 100% in the last 40 years, while consumer wages have been flat. Demand has a lot of catching up to do!
What forces are going to persuade the oligarchs to dig into the piles of cash they are sitting on, and invest the $$$ in production and wages for the masses?
Automation and AI are going to make this game (consumer-capitalism) obsolete before long. Demand is not going to catch up. Ever. They've spent 40 years systematically destroying demand, and that was no accident.
The problems that the world economies are experiencing are due to a greater and greater concentration of wealth. It is not a growth problem.
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