You’re correct, but for reasons different than you may think.
Economies tend not to be zero sum, but they do float thru it. Here’s what I mean:
As a whole, economies either need capital (countries like Mexico) or produce excess capital (the US). Ignore that hey are neighbors here, that’s just a coincidence.
Countries that produce excess capital are not zero-sum. Countries that need capital can actually be zero or negative sum.
However, what you’ve seen over the last couple decades is an aging demographic curve that had shifted the population for producers to spenders over time. When you retire, you become a spender (you are no longer producing capital, but are spending it). As a result of this shift, many of the countries we think about as developed, are stagnating, and that looks like a zero sum situation. It may be, but it is only temporary- although temporary might last up to 3 or 4 decades.
For a quick reference, Japan is the most obvious example here, dealing with fundamental stagnation. Germany is about to hit that too (they probably already have, but it usually takes a few years for the everyday economist to have the documentation to call it as such). China will follow a couple years later.
The US has some of the same. Gen X is smaller than the baby boomers. As such, it’s hard for the generation to pay for the retirement of the previous generation. Hopefully Millenials will be productive enough soon enough to offset this.
Economies tend not to be zero sum, but they do float thru it. Here’s what I mean:
As a whole, economies either need capital (countries like Mexico) or produce excess capital (the US). Ignore that hey are neighbors here, that’s just a coincidence.
Countries that produce excess capital are not zero-sum. Countries that need capital can actually be zero or negative sum.
However, what you’ve seen over the last couple decades is an aging demographic curve that had shifted the population for producers to spenders over time. When you retire, you become a spender (you are no longer producing capital, but are spending it). As a result of this shift, many of the countries we think about as developed, are stagnating, and that looks like a zero sum situation. It may be, but it is only temporary- although temporary might last up to 3 or 4 decades.
For a quick reference, Japan is the most obvious example here, dealing with fundamental stagnation. Germany is about to hit that too (they probably already have, but it usually takes a few years for the everyday economist to have the documentation to call it as such). China will follow a couple years later.
The US has some of the same. Gen X is smaller than the baby boomers. As such, it’s hard for the generation to pay for the retirement of the previous generation. Hopefully Millenials will be productive enough soon enough to offset this.