A Different Economy: Sydney Morning Herald

Advanced economies no longer work the way they once did, and no one should expect a return to "normal" anytime soon. Economists disagree about the reasons. For now, governments and citizens must adjust to a new normal, explains Ross Gittins for the Sydney Morning Herald. Some Australian leaders prepare to adjust for declines in economic growth, productivity and interest rates. Australia's Federal Reserve Bank Governor Philip Long pointed to trends of increased uncertainty due to aging populatoins, people saving more and borrowing less, and the rise of Asia. Long suggests people around the world have a better understanding of globalization with increased competition and technological advances that reduce pricing power for firms and workers. Reduced wages slow economies. Blocking trade or immigrants won’t address the challenges. “So when weak wage growth leads to weak growth in consumption, you don’t get enough business investment and, hence, slower productivity improvement,” Gittins writes, summarizing another economist’s viewpoint. Individuals have little choice but to continuously adapt and learn new skills. – YaleGlobal