As we look forward to the next 20-30 years, we can be pretty sure that population growth is going to slow, and in some countries, there will be a fall. Does the same apply to the economic growth rate?
Two fund management groups have just completed fairly gloomy notes on this subject. At Research Affiliates, Christopher Brightman suggests that US growth will only be 1% a year while Jeremy Grantham of GMO plumps for 1.4%. On their logic, the outlook for Europe, where the demographic trends are even less promising, is even worse.
If they are right, then the effects will be profound. As Mr Brightman points out, fiscal sums are usually calculated on the basis of a return to "normal" growth rates.