New age economics - low growth world?

economic

are we now under a continuous long term period of low growth which has only just began?

discuss.

sevenhills

economic wrote: »

are we now under a continuous long term period of low growth which has only just began?

Growth as measured by GDP is rather crass. We are the 5th richest country, measured by one method, measured by another method we are the 9th richest.

https://fullfact.org/economy/uk-worlds-5th-or-9th-largest-economy/

Conrad

I've been reading these low growth theories for years, so far all turned out wrong.

sevenhills

Conrad wrote: »

I've been reading these low growth theories for years, so far all turned out wrong.

Growth goes up and down like a tarts knickers; which is why we were quoted as having the best growth of large EU nations around the time of the referendum, but now we are at the bottom of the growth table.

Thrugelmir

Some commentators are suggesting a slow down in Chinese growth rates. High debt levels being the concern. Much of the money has been wasted on dead end projects. Chinese banks are State controlled so the potentially write offs aren't an issue. Though the fiscal tightening that may follow. Could reduce growth rates to 2/3% in 5 years time.

Of course Chinese investors are busily buying overseas assets, including UK football clubs. Won't be helpful if the Chinese State imposes restrictions to draw capital back home.

antrobus

sevenhills wrote: »

Growth as measured by GDP is rather crass. We are the 5th richest country, measured by one method, measured by another method we are the 9th richest.

https://fullfact.org/economy/uk-worlds-5th-or-9th-largest-economy/

Same method. Different prices.

It's a question of whether you convert pounds into dollars at market rates or at PPP rates.

Our GDP is the same in GBP whichever you use.

GreatApe

Imagine we had a machine which could produce any good or service we wanted at any volume, at nil cost. What would GDP be? Zero? Infinity?

GDP is meant to measure value added, and by value we use pounds and pence. if the machine is able to produce an infinite amount of goods and services for nil cost and zero price then GDP will be zero.

So how would we measure economic output in such a world? Or value added?

economic

GreatApe wrote: »

Imagine we had a machine which could produce any good or service we wanted at any volume, at nil cost. What would GDP be? Zero? Infinity?

GDP is meant to measure value added, and by value we use pounds and pence. if the machine is able to produce an infinite amount of goods and services for nil cost and zero price then GDP will be zero.

So how would we measure economic output in such a world? Or value added?

good point and its one where we have discussed before how things like tech which has clearly improved quality of life but shows up as zero in GDP.

antrobus

GreatApe wrote: »

Imagine we had a machine which could produce any good or service we wanted at any volume, at nil cost. What would GDP be? Zero? Infinity?

Close to zero.

When the Zombie Robot Apocalypse arrives, aka the Star Trek economy, aka communism, supply will be infinite, prices will be zero, and money will cease to exist.

Thrugelmir

economic wrote: »

good point and its one where we have discussed before how things like tech which has clearly improved quality of life but shows up as zero in GDP.

GDP is a measure that politicians like to bandy around. As no one can question then on it. While avoiding the ones that really matter. Budget deficit, consumer debt, balance of trade etc etc..