After watching the movie, the name Goldman was fresh in my head. Goldman Sachs used new data analysis systems and data from over 100 countries to predict the economy up to 50 years into the future. This might seem like a ridiculous feat due to all of the uncertainties, but it has been done. The first theme Goldman focuses on is that weaker population growth will lead to slower global economic growth.
Their projections imply that global growth will average a little under 3% per year over the next ten years and will be on a gradually declining path, primarily reflecting slower labor force growth. They expect the population growth to fall close to zero by 2075.
The second theme is that some emerging markets become less relevant. Although real GDP growth has slowed in both developed and emerging economies, in relative terms emerging growth continues to outstrip developed growth. There is a possibility that the world’s five largest economies in 2050 (measured in real USD) will be China, the U.S., India, Indonesia, and Germany (with Indonesia displacing Brazil and Russia among the largest EMs), and by 2075, with the appropriate policies and institutions, Nigeria, Pakistan and Egypt could be among the world’s largest economies.
The next theme is that the US will take a step back. This is because growth in the US has slowed down significantly compared to other major nations, causing the value of the US dollar to lessen.
The last theme Goldman mentions is that wealth distribution stays in focus. This is basically just a call for the upcoming challenge in the future of globalization.
Predicting 53 years into the future is near impossible, but the ideas Goldman Sachs presents makes sense based on the current global economy. More wealth is being spread throughout the world and countries considered "third world" in the past like Egypt, Nigeria, Indonesia, and Pakistan all have economies that are currently booming due to high labor force participation, natural recourses, and strong trading power.
ReplyDeleteWow! These are all really interesting themes. The one that makes the most sense to me is that economic growth will slow with declining birth rates. It will be interesting to see if this holds.
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