Future Growth

Boom! And the growth is not there anymore.
No, not because there's a recession .
But because the growth is over :
the long boom that has accompanied
two centuries and a half
of the industrial revolution has run out
and returns zero or a little more development
of the previous story . Or , perhaps , it should be a
bit 'better, but not too much and you have to
settle for a " stagnation
secular " or that or bubbles , as the last
subprime . In either case ,
to make me shudder is that the alarm does not come
tired from Europe to the brink of
deflation, or from old Japan ,
in that spiral has fallen from twenty years old,
but the country that has always defines itself
"The land of unlimited opportunities ,"
animated by an unshakable faith in
robust economic growth that
continue forever . The Americans, in
Apparently , they begin to doubt
themselves. It does not help that the
the same conclusion as a destiny of stagnation ,
least developed countries , to come ,
with different paths , economists
depart from opposing theoretical positions .
Because this is not a provocation
of obscure scholars . To turn on the
fuse of the debate was one of the economists
most influential in the country, former minister
Treasury and the true candidate
Obama at the helm of the Fed : Larry Summers.
And, on the same train is immediately
jumped, with a hint of envy
(' A bit' I was saying the same things,
Larry but , damn him, he said
better, " he wrote on his blog) a character
as influential as the
Nobel laureate Paul Krugman . The point of
departure is that , four years after the end
of the subprime crisis , the economy
U.S. fails to take off . worse ,
Summers says , this was also true
before the crisis, despite the enormous
bubble of debt and liquidity of subprime
there was no sign of overheating
economy, a rear
inflation.
The reason ? According to Summers, this is
happened, because the rate of theoretical interest
you can put into savings balance
and investment, in the context of full
employment, has fallen on a permanent basis .
Indeed , it has become (adjusted for inflation )
negative . Outside the language
code : to convince a company
to take money on loan and invest ,
that we should not pay any
interest on that credit , in fact , that you regalassero
more money . And savers
should pay to keep their money
in the bank. An extreme situation , which
you can not hold for long. Exaggerates Summers ?
Not at all, says Krugman . of
In fact, the situation is that America lives
thirty years. The economy would have remained
stop if there had not been a bubble behind
the other , to sustain consumption . first
that savings banks with Reagan.
Then one of the dot.com , with Clinton.
Finally, the subprime , with the Bush administration.
All drugging the economy and consumption ,
but he left without inflation.
Behind, Martin Wolf points out , there is a
base imbalance : there are not enough
investments to absorb one mole
increasing savings. And the roots of this
imbalance are deep and lasting .
First, the rear of inequality
in American society. The Benefits
growth of recent decades are
were seized from 1% richer. from
post-war period to 1973 the typical income of
an American family has more than doubled .
In the next thirty years has grown
only 22%. In the last decade
is, in fact , decreased. But the rich save
and consume very little.
For the rest, only the bubbles and the debts have
possible for the average consumer to spend dicontinuare
and thus have enticed
companies to invest . but there is
a trend even more fundamental : demographics .
Europe is aging , but a bit ' , also
America over the next ten years,
workforce in the U.S., will only increase
0.2 % per year. It means fewer families
new , less houses, less appliances,
fewer cars . Thus, even when
invest , companies do not have the same
towing function once. Why
invest mainly in computer science and ,
since the prices of information technology
drop of 20 % per year,
also the same volume of investments
involves less money than before
in the economy.
Too much technology , in fact. Or, instead ,
too little ? Because if Keynesians as
Summers and Krugman interpret the
stagnation present and future as a shortage
structural demand , other economists
had already come to the same pessimistic
conclusion starting from defects
the offer. There is not enough innovation ,
Tyler Cowen says , to push
productivity and hence incomes . It is the
theme of an essay than a year ago by Robert
Gordon. The second industrial revolution
- The electricity , the car
and the tractor , even in the toilet
house - that means that revolutionized the
way we live and the way we
produce . Its benefits on the economy is
lasted for nearly a century. The third ,
that of the computer and the Internet, has
exhausted instead , its thrust on productivity
already in the 90s . innovations
continue , but not revolutionize
the economy. The car without a driver's
wonder, but once you're in,
it does not matter who drives . smartphones
or Google Goggles are a way to
fun , rather than to produce better and
more. If the margins of these innovations
add demographic trends ,
stagnation is inevitable. Gordon
provides that the rate of development in the long
American term is halved in this
century , from 2 to 1 % per year. considered
inequality of incomes, means that
99 % of Americans will have to settle
to improve their standard of living
0.5 % per year. We are not far
from 0.2% that marked the centuries until the
700 : the " new normal " is the world's first
of the steam engine . Then, perhaps ,
as Krugman points out , comes out tomorrow
an invention comparable to the light bulb
and all this pessimism goes up in smoke .
Until that time , however, when considered
Your iPhone the door to a
new world, you're the optimists .