If These Two Brilliant Investors Are Right About Future Growth, The World Is Screwed
Nov. 24, 2012
WHAT distinguishes modern man from his ancestors is the expectation of steady economic and population growth. Since the start of the 19th century, both have taken off in a way that was not seen in ancient times or the middle ages.
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.