Falling fertility rate and economic growth
Public lecture by Michael Peters (Yale University) at the UBS Center for Economics in Society at the University of Zurich.
“A world characterized by low—and falling—population growthappears to be the new norm. What does this mean for the future of economicgrowth? Should we expect slower population growth to be accompanied by weakerproductivity growth? Or can new technologies such as AI potentially substitutefor a shrinking population?”
——————————————-
Food for thought!
„A Theory of Endogenous Degrowth and Environmental Sustainability“ by Philippe Aghion, Timo Boppart, Michael Peters, Matthew Schwartzman, and Fabrizio Zilibotti.
„Consumers derive utility from goods with differing environmentalfootprints: necessities are material-intensive and polluting, while luxuriesare more service-based and emit less. Innovation can be directed toward either material productivity or product~quality. Because demand for luxuries is more sensitive to quality, the economy gradually becomes “weightless”: growth is driven by quality improvements, services become the dominant employment sector,and material production stabilizes at a finite level. This structural transformation enables rising living standards with declining environmentalintensity, providing an endogenous path to degrowth in material output without compromising economic progress.“
——————————————-
Highly relevant!
„Investment in an increasingly uncertain global landscape“ by Matthias Burgert, Michael Chui, Denis Gorea and Fabrizio Zampolli.
„Private business fixed investment has fallen or remained flat in advanced economies for decades, with a recent levelling-off also observed in several emerging market economies. The recent increase in uncertainty due to trade tensions will dampen investment while also reducing the effectiveness of monetary policy. In the long run, the outlook for private business investment depends on the potential need to reconfigure supply chains disrupted by higher trade tariffs as well as governments‘ efforts to boost public investment and implement structural reforms.“
——————————————-
The World Bank published its Global Economic Prospects!
The world economy is expected to grow only 2.3 percent this year and 2.4 percent in 2026.
„The global economy is facing substantial headwinds, emanating largely from an increase in trade tensions and heightened global policy uncertainty. For emerging market and developing economies (EMDEs), the weak outlook limits their ability to boost job creation and reduce extreme poverty.“
Public lecture: The Future of Research at U.S. Universities
- Speaker: Prof. David Yermack, NYU Stern
- Panelist: Prof. Antonio Loprieno, Universität Basel
- Chair: Prof. Rolf Weder, Universität Basel
- Wednesday, 16. July 2025, 18:15–19:30.
- Language: Englisch
- WWZ Auditorium, Peter Merian-Weg 6, 4052 Basel
Event Details HERE
| Productivity Bite: Don’t Write Off Europe Prematurely by Guido Baldi Europe is often described as a continent in decline. The European Union has supposedly fallen significantly behind the United States since around the turn of the millennium. This image of a Europe in decline is also painted quite frequently in Switzerland, for example in the discussion about Bilaterals III. The debate about Bilaterals III is important for political reasons, and there are understandable arguments on both sides among supporters and opponents. However, it would be a mistake to reject the treaties with the exaggerated argument that Europe is in decline. It would be better to look at one’s own economic development somewhat more critically. Regardless of the question surrounding the Bilaterals III, one should consider why Switzerland has developed sluggishly economically for many decades and partly lives off the prosperity that was built up in the past and still allows for a very high standard of living. Germany was similarly self-confident ten years ago as Switzerland sometimes is. This is now backfiring. Since the turn of the millennium, growth in gross domestic product per capita has increased somewhat less in the eurozone and the European Union than in the United States (Figure 1). Nevertheless, the growth was solid and comparable to other advanced economies in the world. What is often forgotten is that the two large economies, France and especially Italy, have been economically weak for some time and have dragged down the European average growth. For the past few years, Germany has also failed as a growth engine. A number of medium-sized Western European countries, however, such as Sweden, Denmark, the Netherlands, or Belgium, have achieved rather robust growth rates. The economic miracle in Central and Eastern Europe is also often overlooked. This region has experienced an impressive development since the end of communism. Of course, these countries started from a low levelwith much catch-up potential. Nevertheless, such a convergence process is notself-evident and often fails. The political, social, and economic integration of the countries in Central and Eastern Europe is a great achievement of Europeas a whole. At the same time, it cannot be denied that there have been some developments in Europe in recent years that have gone in an unfavorable direction. In some new technologies, there is a risk of losing connection, innovative startups are struggling, and in some places, bureaucracy has also expanded too much. Nevertheless, it is misguided to speak excessively of Europe’s decline. How has Switzerland performed in international comparison? Since the turn of the millennium, economic growth per capita has been on average about as high as in Germany and the eurozone. But in Sweden, the Netherlands, or Denmark, growth was slightly higher. Sometimes it is argued that economic growth per capita would have increased more significantly without the strong immigration. Such a hypothetical scenario is possible but can hardly be seriously proven. A weaker development without strong immigration would also be conceivable. For example, it would be surprising if the Life Science cluster in Northwestern Switzerland had grown similarly strongly without the possibility of immigration. This industry now contributes a high share to Swiss economic growth (see Figure 2). Ultimately, the discussion about strong immigrationseems to me to be relevant primarily on the social level. How quickly does Switzerland want to change and adapt its infrastructure to high population growth? These are important socio-political discussions for which there are understandable arguments on both sides. From a purely economic perspective, however, one cannot argue that the previous high immigration from Europe depresses economic performance per capita. It should be considered that the Swiss economy has already grown somewhat less strongly than other advanced economies for several decades. Particularly in the 1990s, i.e., before theintroduction of freedom of movement for persons, growth was low, but even before that, Switzerland was often at the bottom of economic growth rankings (Figures 3 and 4). While Switzerland started from a high level ofprosperity, which makes high growth rates more difficult, the level of prosperity is still noticeably higher than in most other countries. But it isclear that Switzerland’s lead has continuously diminished over the past decades. For a long time, Switzerland was at the bottom in terms of growth in Europe. Interestingly, the years since the turn of the millennium – when freedom of movement for persons was also introduced – went somewhat better economically than before. The discussion surrounding the treaties with the European Union sometimes obscures the long-standing structural growth weaknessof the Swiss economy. While we invest a great deal in research and development,we sometimes lag somewhat behind in the successful transformation into products that are successful in the market. In wide areas of the economy that are notexposed to foreign competition, productivity growth often seems to be restrained. In some cases, there are also setbacks. In competition law, for example, one must fear that it will soon be weakened. Overall, it would do Switzerland good to become somewhat more self-critical. Figure 1  Figure 2  Figure 3  Figure 4  |
Kommentar verfassen