After all, global growth, at its current level, is inadequate for mere redistribution among countries to work. Overall global GDP needs to increase.

Global trade as a share of GDP may therefore decline, but without adverse consequences for global economic growth. Rising productivity does not require relentlessly increasing trade intensity.

Growth in per capita GDP

Even the reduced global forecast of 3.4 GDP growth for this year is likely to prove excessively optimistic. Before the crisis, world trade grew at 6 8 annually well faster than GDP.

Europe s extensive regional and global trade networks mean that its internal problems are impeding world trade and, in turn, global economic growth. In 2012, world trade expanded by only 2.5 , while global GDP grew at a disappointing 3.2 rate.

Some countries have bucked the global trend. Indonesia, for example, has experienced accelerating growth, with rising business and consumer confidence boosting investment to almost 33 of GDP.

But the world order has changed. Emerging markets and developing countries now account for 50 of global GDP and 75 of global growth, and demographics will further accentuate the shift in the center of economic gravity.

This was always bad history. The record shows that the period 1950 1973, when government intervention in market economies was at its peacetime height, was uniquely successful economically, with no global recessions and faster rates of GDP growth and growth of GDP per capita than in any comparable period before or since.

A back of the envelope calculation suffices to show that, unless the government is prepared to tolerate a further increase in the investment rate, achieving a GDP growth target of 7.5 implies a significant fall in the growth rate of investment. To compensate for the negative impact on GDP growth, and with export growth constrained by weak global demand, consumption must rise even more sharply, which is hard to imagine.

Owing to strong GDP growth, the debt to GDP ratio decreased from 100.2 per cent to 95.1 per cent.

Despite nerve wracking ups and downs, the last 50 years delivered an unprecedented global growth dividend. Measured according to GDP (admittedly a flawed metric), the world economy expanded sixfold.

1 In 2004, Guatemala reverted to real per capita GDP growth.

Decomposition estimates of GDP expenditure growth in 2004 indicate that Egypt, Jordan and Yemen experienced consumption led growth.

The contribution of investment expenditure growth to GDP growth was moderate in the latter, but impressive in Lebanon.

Among the group of developed countries, the United States of America was once more the main engine for global growth, with real GDP increasing by more than 4 per cent.

In economic terms, the world is entering an era of diminished expectations. If, as predicted, average annual GDP growth amounts to 3 in the foreseeable future, it will take 25 years for the world economy to double in size ten years longer than it took before the global economic crisis, when average GDP growth stood at 5 .

Remotely possible Would require 5 annual growth and redistribution of 0.03 of GDP or growth in excess of 6

A Global Growth Bargain

Grandmasters and Global Growth

The Global Growth Quest

In its most recent WEO, the IMF forecasts global GDP to grow by only 3.3 in 2012, and by 3.6 in 2013. Moreover, the downgrading of growth prospects is remarkably widespread.

Devaluation and debt restructuring worked. In subsequent years, until the global financial crisis erupted in 2008, Argentina s annual GDP growth was 8 or higher, one of the fastest rates in the world.

CAMBRIDGE One of the biggest economic surprises of 2015 is that the stunning drop in global oil prices did not deliver a bigger boost to global growth. Despite the collapse in prices, from over 115 per barrel in June 2014 to 45 at the end of November 2015, most macroeconomic models suggest that the impact on global growth has been less than expected perhaps 0.5 of global GDP.

Cheap Oil and Global Growth

Inclusive Growth and Global Justice

Oil Prices and Global Growth

Hard Truths About Global Growth

But, although developing countries now account for more than half of global GDP growth, advanced countries have yet to admit them to leadership roles that reflect their growing influence in the world economy.

These reforms were followed by a gradual opening to the global economy, a process that accelerated in the early 1990s. Economic growth surged ahead, and returns on public investment soared, reaching an annual growth rate above 9 of GDP, shortly after the reforms were implemented.

While China s GDP has risen by about 70 , making it the largest contributor to global growth, this was aided substantially by debt fueled investment. And, indeed, as that stimulus wanes, the impact of inadequate advanced country demand on Chinese growth is becoming increasingly apparent.

The Asian economies are home to 3.5 billion consumers, but their share in global consumption remains small much smaller than their share in global GDP. China alone accounts for 20 of the world s population, nearly 11 of global GDP, but only 3 of global consumption.

But the long term economic prospects of the global economy as a whole look gloomy. As societies in many OECD countries age, and catch up growth in large emerging economies begins to wind down, global GDP growth is expected to fall from its annual average of 3.6 in the 2010 2020 period to an estimated 2.4 in 2050 2060.

PRINCETON In April 2010, when the global economy was beginning to recover from the shock of the 2008 2009 financial crisis, the International Monetary Fund s World Economic Outlook predicted that global GDP growth would exceed 4 in 2010, with a steady annual growth rate of 4.5 maintained through 2015. But the forecast proved to be far too optimistic.

Some will object that there is little point in creating GDP linked bonds in advanced countries, because there is little uncertainty about GDP growth there. However, even in the relative calm of the post war era, long term real GDP growth in advanced countries has been rather variable.

The key to restoring China s GDP growth is, therefore, returning fixed asset investment growth to at least 25 . With a new round of stimulus, China s excess production capacity and underused outlays (for example, built up real estate assets) could be mobilized immediately, restoring 9 annual GDP growth.

Hans Rosling on global population growth

GDP growth in South East Asia in 2004 exceeded expectations and improved on 2003 growth by the wide margin of 1.5 percentage points.

Real GDP growth continued at a modest pace in 2004 in the Pacific island economies.

China's 10 trillion economy is bigger than those of France, Germany, and Italy combined. Even if its annual output growth slows to 7 , the country will add some 700 billion to global GDP this year.

Moderately possible Will be achieved, given 4 sustained annual growth (2006 2015) with additional social policies costing 0.63 of GDP and redistribution of 0.18 of GDP

GDP per capita, growth of GDP per capita and inward foreign direct investment, landlocked and transit developing countries and developing countries as a whole, 2000 2003

Second, persistent weakness in consumption and GDP growth puts the US economy on a much weaker growth trajectory than that which is built into the government s long term budget estimates. The Congressional Budget Office is assuming 3.4 average growth in real GDP over the 2013 to 2016 period.

While the earthquake and tsunami disaster lowered expected growth in 2005 somewhat in Thailand, Indonesia is still expecting GDP growth to increase next year.

The most common explanation is the global economic slowdown, which has diminished demand for energy, minerals, and agricultural products. Indeed, growth has slowed and GDP forecasts have been revised downward since mid year in most countries.

But, as fertility declines and populations age, the labor engine s contribution to growth will fall sharply, to little more than 0.3 percentage points of annual growth. Even if productivity continues to rise at the same rate, global GDP growth could slow to just over 2 annually, on average a 40 drop from the last 50 years.