Other Sellers on Amazon
The Great Demographic Reversal: Ageing Societies, Waning Inequality, and an Inflation Revival Hardcover – 9 August 2020
Enhance your purchase
Frequently bought together
“Charles Goodhart and Manon Pradhan have provided us an impressively articulated, well-reasoned, and thoroughly researched tour de force of the demographic forces that have impacted the evolution of the world economy and their interrelationships over the past 100 years or so … . the research and thoughtful analysis provide the reader with an insightful window into the policy problems facing developing and emerging economies alike as we face the future.” (Robert Eisenbeis, Business Economics, Vol. 56, 2021)
“I appreciate the global scope of this book and its emphasis on the complexity and interconnectedness of the global economy. This is the kind of long-term thinking that economists, policymakers, and others may find beneficial.” (insurancenewsnet.com, June 25, 2021)
“I think this is a very good forecast. … The book interestingly comments on an implied cycle in the standing of macroeconomics and macroeconomists. … their argument is well worth pondering and entering into our considerations of the biggest economic risks ahead.” (Alex J. Pollock, Law & Liberty, lawliberty.org, May 18, 2021)
“The Great Demographic Reversal is packed with informative charts and tables. It presents a powerful, well-argued challenge to the ‘mainstream’ view that low growth, inflation and nominal interest rates are here to stay. Above all, its message that everyday economics needs to take demography seriously is surely correct.” (Diane Coyle, Financial Times, December 2, 2020)
“This thought-provoking book is a great read, and there is no need to be an economist to enjoy it.” (Philip Turner, Central Banking, centralbanking.com, November 16, 2020)
“It is a pleasure to read a book this well argued. There is a good deal of careful analysis and there are lots of tables and graphs.” (Charles Taylor, Financial World, November 2020-January 2021)
From the Back Cover
This book will be of interest and understandable to anyone with an interest on where the world's economy is going.
Review this product
Top reviews from other countries
P.118 "the initial recovery to full employment at the end of the 1930s and early 1940s owed more to rearmament and Word War II than Keynesian economics". The latter part of this statement is correct. Keynes published the General Theory in 1936 and the first Keynesian budget did not take place until after the war broke out. However what the author's leave out is that the UK's "Great Depression" is a bit of a myth - between 1929-32 the domestic economy actually expanded. GDP shrank entirely because of the contraction in exports. The recovery began when sterling left the Gold Standard and interest rates were cut. Unemployment ONLY remained high in the 1930s in the UK because of demographics (there is a significant irony here given the authors' focus) as the workforce expanded by 1m during the 1930s.
p.133 "MITI orchestrated Japan's rapid ascent from the shadows" The authors cite Chalmers Johnson's The Developmental State in support of this statement. Unfortunately for the authors, Johnson's work has been largely debunked. For example which sector of the Japanese economy received the most state intervention/protection and which sector received the least intervention/protection? The answers are Agriculture and Electronics. The former is generally considered the most inefficient sector in Japan and the latter is one of its strongest. So much for the power of the state in Japan to direct growth. There is more - In the early 1960s MITI tried to cartelise the Japanese automobile industry (into the equivalent of a British Leyland) but luckily the auto companies resisted this move. Most economists now accept having 4 big auto companies meant a high degree of competition and success. There are plenty of other examples of MITI's failure and plenty of examples of industrial policy failures elsewhere (in the UK under Wilson, etc).
P.163 the authors state fiscal policy was never sufficiently expansionary and as a result monetary policy had to be more expansionary than otherwise in order to "maintain macroeconomic balance and the inflation target [in the period before the start of the GFC in 2007]." This was one of the most confusing statements in the book. As I said to Gus O'Donnell at the time, 'the reason inflation is coming in below target is because of a shift in the supply curve because of China's reintegration into the global economy. In this instance the Bank of England should not be cutting interest rates because they are mistaking supply driven disinflation for insufficient demand'. I think I was subsequently vindicated by events - by cutting interest rates the BoE and other central banks stoked asset prices and in particular the housing market as well as new esoteric financial instruments and it ended in a huge financial crisis. Also I don't understand the authors on this point because they are so vocal over the demographic issue that was playing the central role in causing inflation to come in below par - after all no one thinks interest rates should be cut because the price of a PC declines every year (another example of supply driven deflation).
P.163 Chapter on debt - I don't understand why the extensive work by Rheinhart and Roggoff (This Time is Different) is ignored (I could find no reference to their magnum opus).
P.185 proposals for new rules on 'insiders' and 'outsiders' - these proposals are completely unworkable. No investor would be willing to be subject to financial liabilities from being considered an insider. Note also an investor who owns say 10% does not, and I stress this as someone who is a PM, have access to inside information (that is illegal). Under the proposals, I would expect all investors would limit the size of their holding to the hurdle (between being an outside and an insider). If the limit was set at 5% no one would want to own more than that because of the negative financial actions by the regulator that the authors propose on all insiders post the company having dificulties. This would then exacerbate the problem of 'absentee landlords' as no single investor(s) would have sufficient clout with management who would be free to pursue their own objectives (exactly the problem the authords are seeking to address).
P. 197 land tax - I don't understand why they propose a tax on the value of land rather than on a gain in value. My opinion - replace IHT with a capital gain (paid on death) on the gain in value of all the properties an individual has owned in their lifetime (as recorded in the Land Registry). Other assets would be subject to the same capital gains tax.
All in all I want to say that this is a very interesting book, a very ambitious book and I would certainly recommend everyone interested in the subject to read it.
The essential idea is that over the past 40 years, what has made the world tick has been the supply of labour provided to a globalised market place by China, aided by internal population moves in China from rural to urban areas. As the demographic balance of the Chinese population alters though and the internal migration stabilises, and as there are moves against globalisation in Western countries (the losers from globalisation may have lost their economic bargaining power, and the political movements that were founded to protect them may no longer do so - as they believe in the brotherhood of man, but they have not lost their voting power at the ballot box), we can expect the economic developments of the last 40 years to unwind; and for example inflation to rise again (including next year as countries take a less-globalised road out of the pandemic, the authors think).
The authors look at the recent economic history of Japan, and believe that that outward investment in low-wage economies - along with the changing demographics of Japan (which makes their growth per worker look a lot better than their growth) - explains the last 30 years or so there...And at India and Africa, where there will be a lot of young people in the next few decades (just as there have been in China over the last few decades), but where the 'cost of doing business' ma be much higher for Western companies than it has been in China, and where the prospects of internal migrations within India and Africa to 'where the jobs are' are less bright.
I don't know whether the authors have got this right - but I can see their point of view, and it's certainly worth thinking about...