Wednesday, January 14, 2015

Aging and declining population will make us richer more slowly, said McKinsey research

Wish I were at the mall to raise GDP!
Because of population decline, economic growth in the world's 20 largest economies will be reduced by 40% over the next 50 years. Does that mean that those societies will see their living standards falling dramatically, as the alarmists imagine the aging future? The answer is no. GDP per head will keep rising higher, aka people will still be getting richer every year, only more slowly than without population aging. What if that's exactly what they want: a comfortable but slower life? Who cares about GDP if there will be more time at the park?

"Declining population growth that shrinks the pool of available labor over the next 50 years will reduce by 40% the rate of growth in global economic output for the world’s 20 largest economies compared to the past 50 years, according to a new study.
Among the 20 nations studied, only Nigeria will see employment growth and GDP growth increase over the coming 50 years, based on recent demographic patterns, says McKinsey. (On a per capita basis, Turkey, Argentina and South Africa will see GDP growth increase.) Several nations will see outright declines in employment, including Japan, Germany, Russia, Italy and China.
What’s the practical impact of a 40% decline in global growth? It means the global standard of living would rise 2.3 times in the next 50 years, down from 2.8 times over the past 50 years

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