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Post by birdseye on Jan 19, 2022 14:01:42 GMT
From the Investors Chronicle. The human life cycle is predictable - new ones spend their first 20 years or so as "cost centres" producing nothing much. The next 40 to 50 years are the productive ones before a final consumption period of 15 to 20 years. From this it follows that for maximum growth an economy requires the maximum bulge of people in those middle years especially towards the younger end where innovation and entrepreneurship lie.
Now thats the theory but how true is it?. Taking Japan as an example and covering its growth from a backward economy with and average age in 1950 of 22, the writer plotted a graph of a 5 year averge of GDP growth against median population age. This gave an R squared value of 0.8 in other words saying that the ageing poulation accounted for 80% of the decline in GDP growth rate.
Someone will no doubt pipe up and say that "correlation isnt causation". True but so is the reverse that there can be no causation without correlation. But there is also the chicken and egg question - if lots of kids are a sort of pension for people in poor low growth economies, it follows that success in growing the economy could well cause populations to age.
Apparently this correlation applies in many other economies - the UK, the USA, China and more.
There are other factors such as social systems, education, governance, corruption which mean that the correlation between median age and growth rate drops to 0.29 if you list a load of different countries with Brazil, Nigeria, South Africa below the line and India Vietnam and China above the line.
Maybe what the UK needs is an influx of educated 20 year old economic migrants. A few Elon Musks for example?
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Post by c-a-r-f-r-e-w on Jan 19, 2022 14:33:17 GMT
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Post by birdseye on Jan 24, 2022 9:57:02 GMT
Yes, I thought it a fascinating article and one that made a lots of sense. I guess that another factor in play for Japan and for China was the ability to progress fast simply by adopting the western technology that had already been developed. Copying is easier than inventing.
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Post by c-a-r-f-r-e-w on Jan 24, 2022 14:46:07 GMT
Yes, I thought it a fascinating article and one that made a lots of sense. I guess that another factor in play for Japan and for China was the ability to progress fast simply by adopting the western technology that had already been developed. Copying is easier than inventing. yes, that’s why growth tends to slow down for developed economies. All the low-hanging fruit of existing advances has been picked, and much of the infrastructure you need has been built, so further advances have to come via innovation. (it’s been said that Japan also adopted some management practices supposedly developed by but neglected in the West, but not sure how true that is). |
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Post by leftieliberal on Jan 24, 2022 17:41:13 GMT
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Post by c-a-r-f-r-e-w on Jan 24, 2022 19:10:51 GMT
Deming, yes indeed. When I had googled about it, these days you seem to get less about him, and more about the Japanese influence on Western Manufacturing etc. The west did seem to take Deming more seriously after the rise of Japan, but I had the impression there are some other things that have been borrowed. (There is also an argument that Taylorism was also adopted by Japan and was a bridge to Total Quality Management). returning to the idea in the article of falling productivity (and hence growth) as average population age rises, this might not apply so much if the more productive years are extended further into older age. |
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Post by birdseye on Jan 24, 2022 20:28:53 GMT
Deming! Havent heard of him since business school.
I doubt " returning to the idea in the article of falling productivity (and hence growth) as average population age rises, this might not apply so much if the more productive years are extended further into older age.". Part of the human ageing process is to acquire experience and to use that instead of trying something new. Your brain deteriorates after about age 20, the "system" tends to grind the innovation out of you. Negativity replaces hope.
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Post by c-a-r-f-r-e-w on Jan 24, 2022 20:36:11 GMT
Deming! Havent heard of him since business school. I doubt " returning to the idea in the article of falling productivity (and hence growth) as average population age rises, this might not apply so much if the more productive years are extended further into older age.". Part of the human ageing process is to acquire experience and to use that instead of trying something new. Your brain deteriorates after about age 20, the "system" tends to grind the innovation out of you. Negativity replaces hope. Well, you have a point, though, it deteriorates in some ways and can improve in others*, might be another way of putting it. Improvement might involve some effort though! * (and maybe you can recover some of the deterioration later) |
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Post by birdseye on Feb 6, 2022 15:49:57 GMT
Tried hard. Every winter I have done a unit of an OU degree course - mostly pure maths but including IT and others. Always finish the course and always pass but 6 months afterwards I havent a clue what it was about. And whats more I can only do the maths in the mornings, never after lunch.
Bit like an old car. Flat out works for a mile after which it overheats and grinds to a halt. But when it was a new car ..........
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