Above is where the idea that the old ideas need rethinking. Global population has risen 197 per cent since 1950. With the rise of the baby boomers, economic ideas need to be rethought in the context of 7 billion people.
The global median age is now estimated at 30, this has risen from 23 in 1950. Pew Research has estimated the median age will be 37 by 2050. While this in itself is interesting data it doesn’t break down the global players in World Trade and GDP.
New economic theory has to take into account ageing populations, only Western Africa’s median age has fallen since 1950 according to UN data.
With the rising age of the global population, the rise of the middle class in Asia, disposable income is disrupting the supply and demand ideas that came about in the pre-war eras.
Looking at the UK (because I live here),the rise in retail sales have been positive since the June referendum. Economists predicted a downturn, yet it has not to date. This is most likely because nothing has really changed other than the pound being hit by speculators and the BOE stepping in to announce a rate cut and monetary stimulus (many in the market are still wondering why Carney did this) . At the time the decision only seemed to undermine any confidence there was in GBP.
Carney spoke at the London School of Economics on Jan 17th, and has been reported to say that the consumer led growth could fizzle out due to inflation and the falling pound. He also is quoted in Business Insider saying that the BOE saved 250k jobs due to their actions after the vote to calm markets. Supplied below is the chart accompanying the proclaimation. Whatever helps you sleep at night I suppose. I do not see the evidence, I see what you want me to see. But what I really saw after the vote as UK business not over reacting by firing everyone in a blind panic because of the referendum.
The UK will not see a turn around on consumer led growth or a rise in unemployment until article 50 is triggered and there is some clear indications where business will be hit.
On the consumer growth side we must remember the older generations are the ones that are spending and many of the millennials are spending because they are still at home.
Many have complained about Theresa May dragging out the triggering of article 50, but many in the business community should be pleased, as they get their contingency plans in place to offset any disruption expected. Any say business person would be doing that, while many are probably acting like the rabbit
Into the great unknown we venture.