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The World Economy Just Can’t Escape Its Low-Growth, Low-Inflation Rut

nytimes.com

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Re: The World Economy Just Can’t Escape Its Low-Growth, Low-Inflation Rut

#31

Post by killjoywashere »

stubbort wrote: post #12

Low grow is good. You can't sustain growth forever.

There's a "Talk at Google" about this. I think it's Douglas Rushkoff (1), who wrote Throwing Rocks at the Google Bus. Basicly, if you rethink the economy in terms of a global garden, where you're spatially bounded, you just have to accept that there's only so much carbon, silicon, water, etc. Paul Romer (Nobel Economics 2018, 2) has a similar point (again trying to recall a lecture here...): if you take all the copper in the world, you can only make so many circuits. So tech can only get you so far. There's some kind of upper bound on "just make more motors". Progress may well occur, but it will take innovations not yet foreseen.

(1) https://www.youtube.com/watch?v=0EnmH95016w

(2) https://www.nobelprize.org/prizes/economic-sciences/2018/rom...

Re: The World Economy Just Can’t Escape Its Low-Growth, Low-Inflation Rut

#33

Post by koboll »

dijit wrote: post #6

So, I have a question and it may seem like a childish or stupid one because I think I've missed something somewhere. Our society, and I think capitalism in general, seems to be pinned on the foundation of perpetual growth. The question for me is: how can we have infinite growth on a planet with limited resources?

>The question for me is: how can we have infinite growth on a planet with limited resources?

1. Some resources are truly unlimited. We can ultimately meet all our food and energy needs via unlimited energy from the sun, for example. If necessary, the economy would adjust to do just that.

2. We aren't going to be limited to one planet forever. We'll be mining extraterrestrial objects long before we run out of stone or metal on Earth.

Re: The World Economy Just Can’t Escape Its Low-Growth, Low-Inflation Rut

#34

Post by devmunchies »

saveThePlanet wrote: post #7

In my opinion a deflation is what the world and especially the nature needs. People have to stop wasting our limited resources.

I think this is a valid point of view. Has anyone ever stopped and asked if an ever-increasing GDP is sustainable?

Re: The World Economy Just Can’t Escape Its Low-Growth, Low-Inflation Rut

#35

Post by ggm »

stubbort wrote: post #12

Low grow is good. You can't sustain growth forever.

The long-term rate of growth in financial investment is said to be 7% at best. For much of economic history the value of currency was so stable that agricultural workers pay as essentially unchanged across generations.

Look at the chrts in http://www.econ.ucdavis.edu/faculty/gclark/papers/long_march...

Re: The World Economy Just Can’t Escape Its Low-Growth, Low-Inflation Rut

#36

Post by ggm »

seppin wrote: post #29
ummonk wrote: post #5

Past Chinese growth has set expectations too high. It is ridiculous to point to a 6.6% growth rate and say it is low.

Also ridiculous to think those numbers were accurate.

I don't think anyone thought they were accurate, what mattered was the fiscal policies the Chinese state bank enacted regarding the value of the renminbi.

Re: The World Economy Just Can’t Escape Its Low-Growth, Low-Inflation Rut

#37

Post by Spooky23 »

jlarocco wrote: post #26

"That helps explain why American workers’ wages have been rising relatively slowly despite a low unemployment rate." Wouldn't surprise me if that's a big part of the problem. Despite tax cuts, low interest rates, and other corporate handouts, nothing's getting passed onto the people who do most of the spending. Inequality is higher than ever and the people making the most money need it the least.

Seriously.

My family is relatively well off and our home was purchased back in 2004. Still, the steady march of expenses has certainly increased faster than income.

Re: The World Economy Just Can’t Escape Its Low-Growth, Low-Inflation Rut

#38

Post by [deleted] »

devmunchies wrote: post #34
saveThePlanet wrote: post #7

In my opinion a deflation is what the world and especially the nature needs. People have to stop wasting our limited resources.

I think this is a valid point of view. Has anyone ever stopped and asked if an ever-increasing GDP is sustainable?

[deleted]

Re: The World Economy Just Can’t Escape Its Low-Growth, Low-Inflation Rut

#39

Post by the8472 »

skybrian wrote: post #17
cagenut wrote: post #2

I still personally believe that the real underlying truth of "peak oil" was that as lower EROEI sources replaced higher ones, even though we would be able to grow the total number of barrels per day, the net-energy provided to drive the economy from those barrels would(is) plateau(ing). Everyone who points to fracking (or even worse tar sands) as a disproof of peak oil never understood the underlying argument about h…

Energy intensity is going down [1], so it seems like the economy is less about energy consumption than it used to be? But averages can be misleading. [1] https://en.wikipedia.org/wiki/Energy_intensity

To some extent that's because, apart from construction, we're outsourcing the manipulating-atoms business to other countries which results in higher energy intensity abroad.

Re: The World Economy Just Can’t Escape Its Low-Growth, Low-Inflation Rut

#40

Post by roenxi »

skybrian wrote: post #17
cagenut wrote: post #2

I still personally believe that the real underlying truth of "peak oil" was that as lower EROEI sources replaced higher ones, even though we would be able to grow the total number of barrels per day, the net-energy provided to drive the economy from those barrels would(is) plateau(ing). Everyone who points to fracking (or even worse tar sands) as a disproof of peak oil never understood the underlying argument about h…

Energy intensity is going down [1], so it seems like the economy is less about energy consumption than it used to be? But averages can be misleading. [1] https://en.wikipedia.org/wiki/Energy_intensity

There are two interpretations. The first is that energy doesn't matter, and the second is GDP doesn't matter. GDP was only important when it was a proxy for energy (for a long time, the correlation between energy /capita and gdp/capita was very strong).

IF you assume that GDP is no longer a good measure of energy but that the people care about energy more, it provides an interesting interpretation of Trump's 2016 victory, the fracturing of politics and the widespread condemnation of politicians. People's lifestyles are no longer being buoyed by a rising quantity of cheap energy, and they are angry without quite understanding why their lives don't seem to be improving.

It is easier to put tensions aside and work together when you are seeing an increase in your living standards each year - even if you don't agree, it obviously works. Harder to do when they are falling - even if you agree, something seems to be going wrong.

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