Inertial Economic Growth And The Future Wars

The results of the thorough analysis presented in a series of posts validate the original assumption that the growth rate in the developed counties has been falling according to the inertial growth relationship. The observed decrease in the rate of growth contradicts the expectation of a constant growth rate (i.e., exponential GDP growth) as suggested by the mainstream economic approach. Regular actors of the global economy and financial markets ground their strategies on the assumption of the transient zero-mean fluctuations around the constant growth rate. The gap between the real and expected growth is a potential source of economic, financial, and social problems. 

Among many other parameters, companies, firms, and enterprises base their development plans on the mid- and long-term expected economic growth as the expression of moving balance between potential demand and targeted supply. The decaying rate of economic growth has never been a part of this approach with the mainstream opinion of the long-term exponential growth. When the cumulative gap reaches some critical value the economy makes self-adjustment and returns to the real trajectory of economic growth. This could be expressed as an economic recession. In the past, such gaps were growing at a higher rate because the rate of economic growth was higher and its fall was much faster according to the inertial growth relationship. With the decreasing rate of growth, recessions have to occur less often since the deceleration of the growth rate at the current levels of the real GDP per capita in developed countries is almost negligible.  

In the world of decaying rate of economic growth, and thus, the long-term revenue decrease, financial institutions have to look for the places with higher growth rates where investments provide higher returns (likely with some elevated risk). The profit-generating industries and services are forced to move to these higher-growth-rate places. With time, the growth rate decreases (growing GDPpc lowers the rate) event in these places and the revenue as well. The possibilities to retain the historical revenue level are shrinking. It is not excluded that the new methods to return the financial profit to the desired level are associated with global economic and social redesign expressed in the forced creation of such zones of higher revenue.  

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