We’re in a Low-Growth World. How Did We Get Here?

Economic growth increases wealth and improves living standards, driven by additional workers, work hours and technological advancements that increase productivity. But economic growth and income have slowed for the world’s most advanced economies, and the trends contribute to rising inequality and populist movements. Economists are trying to determine if supply or demand issues contribute to low growth, or both. “It increasingly looks as if something fundamental is broken in the global growth machine – and that the usual menu of policies, like interest rate cuts and modest fiscal stimulus, aren’t up to the task of fixing it (though some well-devised policies could help),” writes Neil Irwin for the New York Times. “As a matter of arithmetic, the slowdown in growth has two potential components: people working fewer hours, and less economic output being generated for each hour of labor. Both have contributed to the economy’s underperformance.” Some analysts suggest that the economy is stuck in “secular stagnation” with low demand. The bottom line is that jobs are not plentiful – especially jobs that are challenging and creative. – YaleGlobal