Global potential growth becoming low: What consequences?
As a result of population ageing, the decline in productivity gains and the effect of crises and recessions, global potential growth is becoming increasingly low, around 2.1% per year in the decade 2020 against 4.2% in the decade 2000 and 2.9% in the decade 2010. What are the consequences of low global potential growth? Monetary policies will remain expansionary, given the high debt level and central banks' new strategies; if real interest rates have to be much lower than real growth, they will be (on average for the world) zero or negative; this will bring about a conflict in the determination of asset prices; Global energy consumption will decrease as a trend and so will CO 2 emissions; the world has probably passed "peak oil" (the peak of oil consumption); Many conflicts may arise, since the "global income cake" will hardly increase: between generations, between rich and poor countries, between wage earners and companies.