How to Break Out From the Great Stagnation
The key to higher growth lies in a well-managed transition from a tangible to an intangible economy.
Not going anywhere fast.
Photographer: Bob Riha Jr/Archive Photos via Getty Images
The last three years have been so relentlessly dismal — a global pandemic followed by the invasion of Ukraine — that it is tempting to idealize the old days. Just as the survivors of World War I looked back on the Edwardian era as one long country house weekend (“Stands the church clock at ten to three? And is there honey still for tea?”), so we observers of Ukraine’s agonies may think of the pre-Wuhan world as one of peace and prosperity. Yet in fact it was an era of sustained disappointment punctuated by the occasional crisis.
For most of the second half of the 20th century, developed countries could rely on real GDP growth of more than 2% a year. From 2000 to 2016, that growth rate halved in America and Europe to 1% a year — and this despite low interest rates, high profits and dizzying technological breakthroughs.