21st century economic growth to be slower than thought
Global future economic growth will be slower than predicted, with developing nations taking longer to close the wealth gap and approach the income of wealthier nations, a new study has predicted.
Global future economic growth will be slower than predicted, with developing nations taking longer to close the wealth gap and approach the income of wealthier nations, a new study has predicted.
“We're at a point where we maybe need to significantly increase financing for (climate) adaptation in developing countries, and we're also at a point where we might be overestimating our future ability to provide that financing under the current fiscal paradigm,” said Matt Burgess, assistant professor of environmental studies at University of Colorado Boulder who led the study.
Burgess and his colleagues used two economic models to project how much the global economy will grow over the next century and how quickly developing countries will approach the income levels of wealthier nations.
Both models found the global economy will continue to grow, but that growth will be slower than most economists expected and there will be a larger income gap between wealthier and poorer nations.
This means richer countries may need to help finance climate adaptations for poorer countries, and debt-ceiling crises, like what the United States experienced this spring, may become more common.
“Slower growth than we think means higher deficits than we expect, all else equal,” Burgess said. “That means debt would likely become more contentious and important over time, and could mean more frequent debt-ceiling fights.”
Still, many wealthy nations are accustomed to growing their way out of debt, but that may not be possible under the new scenario, according to Ashley Dancer, a graduate student at CU Boulder and co-author of the study.
“The next question is: what are some ways that we should be or could be helping [lower-income countries] adapt, if the expectation is that they're not going to meet the level of wealth that would allow them to do that quickly and aggressively?” Dancer said.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
Power of Compounding: How many years will it take to reach Rs 3 crore corpus if your monthly SIP is Rs 4,000, Rs 5,000, or Rs 6,000
IRCTC Dividend 2024: Railway PSU announces 200% interim dividend - Check record date and other details
Power of Compounding: Salary Rs 25,000 per month; is it possible to create over Rs 2.60 crore corpus; understand it through calculations
Reduce Home Loan EMI vs Reduce Tenure: Rs 75 lakh, 25-year loan; which option can save Rs 25 lakh and 64 months and how? Know here
New Year Pick by Anil Singhvi: This smallcap stock can offer up to 75% return in long term - Check targets
PSU Oil Stocks: Here's what brokerage suggests on these 2 largecap, 1 midcap scrips - Buy, Sell or Hold?
Power of Compounding: How many years it will take to reach Rs 2 crore corpus if your monthly SIP is Rs 3,000, Rs 4,000, or Rs 5,000
02:11 PM IST