Ruchir Sharma is the latest economist to embrace the popular notion that we – and the rest of the world – are unable to grow as we once did. Supposedly the “global economy has changed in ways that reduce growth,” and because of the changes, subdued economic activity will be the structural norm going forward. That's the bad news for the congenital cynics desperately seeking validation of their pessimism.
But before we get to the good news, it's worth taking the time to unpack the why behind Sharma's own pessimism. Specifically, he believes that in the past (between WWII's end and 2008) "the global economy was supercharged by explosive population growth, a debt boom that fueled investment and boosted productivity, and an astonishing increase in cross-border flows of goods, money and people.” He got one out of three right.
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