Demographics will have a key impact on the global economy

Let us first look at the global level. The world is going to experience significant population ageing, from which we can expect: A decline in savings and investment; A fall in potential growth; A fall in consumption of commodities and in CO 2 emissions, and low commodity prices; A debt problem since the equilibrium real interest rate is rising, and therefore increasing central bank interventionism ; And normally rising inflation. We must then look at the heterogeneity of regions' situations. Africa and South Asia will experience much less ageing than other regions of the world. This will make high international capital mobility important, so that "old" countries can have external deficits by reducing their external assets and "young" countries can accumulate external assets by transferring capital to "old" countries. Without this international capital mobility, global growth will be further reduced and "old" countries will be in trouble.