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Global Growth

Silk Road 2.0: US Strategy toward China’s Belt and Road Initiative

Date of Editorial Board meeting: 
Publication date: 
Wednesday, October 4, 2017
Abstract in English: 
The balance in Eurasia is shifting. China’s President Xi Jinping has ambitious visions for Asia, while the rest of the world reshuffles to find its place in the rapidly changing global order. Each nation guesses at the United States’ new role in the world, while China broadcasts its own role across the globe, ready to challenge those who stand in opposition to its vision. China’s impact is global: reaching from the perils of the Korean peninsula; stretching across Asia, the Middle East, and Africa; and influencing regimes along the way. During this historic moment, the importance of Asia to US interests grows all the greater.
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66
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Can long-term global growth be saved?

Date of Editorial Board meeting: 
Publication date: 
Thursday, January 1, 2015
Abstract in English: 
The past 50 years was a period of exceptionally rapid economic expansion. Average per capita income almost tripled, and the global economy expanded sixfold in GDP terms. But the long-term growth outlook is extremely uncertain. Some observers raise the issue of challenging demographics; they talk about “secular stagnation” and express doubts about whether future growth can match its rapid upward trajectory of recent decades. Others point to the transformative impact of technology and paint a more optimistic picture. The debate about growth goes even deeper and broader than this. Many question whether—and how—growth can be sustainable and inclusive. There is a lively discussion about whether GDP is the right measure of growth. Amid such debate, it is difficult for policy makers and businesses to respond effectively.

In this report, the McKinsey Global Institute (MGI), which has studied growth in 30 industries in more than 20 countries over the past 25 years, reviews patterns of global growth over the past half century, focusing on the two key drivers of that growth—labor and productivity. Our broad finding is that, in the face of declining population growth that is putting pressure on the pool of available labor, the rate of GDP growth is set to be 40 percent lower than its rate over the past 50 years. To compensate fully for weakening labor growth would require productivity growth to accelerate by 80 percent from its historical rate. Drawing on five detailed sector case studies, we find that it is possible—but extremely challenging—to boost productivity growth by this margin. However, aggressive action would be needed to enhance competitiveness, harness technology, mobilize labor and further open up and integrate the world economy. Collectively, we need to engage in a frank conversation about the tough trade-offs that such action would entail.
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148
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