The world is headed toward a no-growth economy, but how the transition is managed will make the difference between whether that correction is drastic or benign. This warning came from economist Hannes Kunzon tat a plenary discussion on rethinking growth. “We don’t have to rethink growth,” Kunz said. “Growth is going to go away.”
“The financial claims on the world economy – such as debt obligations, pension expectations, stocks, investments – can only be paid back by extracting more resources and converting them into financial assets. But we have a finite amount of resources, and those resources are becoming less and less available, so we’re trapped,” he said.
Much as has occurred in financial markets with the bursting of the credit bubble, ecological overspending is about to reach a tipping point with a significant effect on the world economy.
Models done by Kunz’ Institute for Integrated Economic Research show per capita GDP stabilizing at levels anywhere from those of 20 years ago to those of a hundred years ago. “We need to start thinking about how we manage the transition,” he said. “If we don’t do it right, we won’t have a chance to build something good afterward.”