The Rate of Global Economic Growth Is Meaningless
As the world economy splinters, broad measures of its condition are becoming less relevant.
One measure of the world economy.
Photographer: STR/AFPEvery now and then an economic concept must be gracefully retired. My latest nomination for this honor is the notion of a “global rate of economic growth.”
A meaningful definition of a global rate of economic growth requires that a fair number of countries, or at least a preponderance of global GDP, moves in the same direction at a broadly common and even intertwined rate. This idea once made sense, as often there were a few common factors — Chinese-driven growth, for example, or energy prices — that affected a large number of countries in similar ways. In the future, however, economic growth will increasingly come from idiosyncratic and nation-specific factors, not global ones.