Wednesday, July 23, 2014

3 Charts

1) Growth is going to slow down

“Global economic growth is set to slow way down after 2020. Lots of factors contribute to this. In the nearer term, lingering effects of the financial crisis will continue to hurt economies for years to come, as low investment and high unemployment work their ways out of the system. But beyond that, aging populations will drag down economic growth. While the OECD population is expected to grow by 17 percent through, the working-age population could fall by 7 percent. And in OECD and non-OECD nations, labor’s contribution to GDP is expected to hold flat or fall, respectively. In addition, educational attainment is expected to slow down, meaning an already potentially smaller pool of labor will have a slower-growing pool of skills to draw from.”

2) Climate change will play a part in dragging down growth

“Ironically, the climate change brought about by economic growth is set to be a drag on the global economy for decades to come. By 2060, climate change will drag on GDP anywhere from 0.6 percent to nearly 2.5 percent, with by far the heaviest effects in southeastern Asia. By 2060, climate change could drag that area’s GDP down by more than 5 percent. Those effects will come about largely for two reasons: how a shifting climate hurts the agriculture industry and how much rising sea levels shrink the world’s available land.”

3) Inequality will keep growing

“The above chart shows the ratio of earnings of people at the 90th percentile of earnings to those at the 10th percentile. In all OECD countries, that ratio will grow substantially. Among these OECD countries, most of the new inequality will happen between the middle and top of the income distribution. That’s an effect of job polarization — as technology replaces middle-skill jobs, the number of high- and low-income workers will only grow while the middle stagnates.”

The coming 50 years of economic problems, in 3 charts

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