Saturday, July 15, 2017

(again, shorter)

It seems there are two ways to think about how things will look if the decline continues. This is the wrong way:

Graph #1: Showing the Most Recent Trend Continuing
If we stay on track with the 2009-2016 trend, by the year 2100 RGDP per Capita will reach the level it would have reached by 2050 if we had stayed on track with the 1949-1973 trend.

But Graph #1 does not show the continuation of decline. It shows only the continuation of the low-growth trend that resulted from the decline. The decline is the change in the rate of growth, from 2.4% to 2.1% to 1.34% and, unless things change, to a growth rate lower than 1.34% in the foreseeable future. And then again. That is the decline.

This is the right way to look at the decline:

Graph #2: A Continuing Decline in the Rate of Growth

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