Global productivity continues to slow, and this is terrible news for the world economy according to Morgan Stanley. Based on the current levels of productivity, developed market potential output growth indicates that it will now take 56 years for GDP to double as opposed to the previous benchmark of 25 years.
According to Morgan Stanley’s estimates, developed market potential output growth is only 1.25% at present, an estimate that is 0.25 percentage points below the market consensus and official forecasts and a staggering 1.5 percentage points below the output growth of 2.75% predicted in the late 90s.
Economic Growth: Wages And The Productivity Paradox
Morgan’s long-term output projections are even more concerning. Assuming developed markets can return to the pace...
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