The Demographics Myth

The demographics of aging will not be a barrier to faster growth in the “turning” to a new generational epoch of greater risk-tolerance and faster growth. The data show both that aging is itself an incomplete explanation for the “new normal” and “secular stagnation,” and that it is offset by growth in educational attainment. Moreover, the worst of the aging effect is behind us in the US. Our alternative explanation for “secular stagnation” is a “turning” toward risk-aversion driven by trade and oil shocks. They fell against a backdrop of fear and cognitive dissonance triggered by the terror attacks of September 2001, a new clash of civilizations when the global culture had believed we had reached “the end of history.” We now face a new “turning” toward risk tolerance and better growth. Because demographics are shown to be irrelevant, they won’t be a barrier.