12-10-2016, 01:17 AM
(12-09-2016, 07:59 PM)Mikebert Wrote:(12-07-2016, 09:19 PM)Warren Dew Wrote:(12-07-2016, 06:31 PM)Mikebert Wrote:(12-07-2016, 01:13 AM)Warren Dew Wrote: d(GDP/worker)/dt / (GDP/worker) > 0 (percentage individual worker productivity increases)
d(workers)/dt / workers < - d(GDP/worker)/dt / (GDP/worker)
(percentage worker population decreases faster than percentage worker productivity increases)
d(GDP)/dt / GDP = d(workers*GDP/worker)/dt / (workers*GDP/worker)
= (GDP/worker * d(workers)/dt + workers * d(GDP/worker)/dt) / (workers*GDP/worker)
= d(workers)dt / workers + d(GDP/worker)/dt / GDP/worker < 0 (GDP decreases)
d(population)/dt / population > 0 (percentage population increases as old people have retired but not died yet)
d(GDP/population)/dt = d(GDP)/dt / population - GDP * d(population)/dt / population^2
= (GDP/population) * (d(GDP)/dt / GDP - d(population)/dt / population) < 0
(average living standard for the economy cannot keep up)
You already have negative GDP growth (or at least assumed it). Until population also falls per capita GDP then must also fall. There is no need for the math which only reiterate the initial assumptions.
So far per capita GDP appears to have been rising slowing (through 2013)
http://www.indexmundi.com/g/g.aspx?v=67&c=ja&l=en
So I looked t the GDP trend and so the same thing:
http://www.indexmundi.com/g/g.aspx?c=ja&v=65
So what is you point? You make and assertion that if true would predict both of these things would be going down. You point out that your assertions are supported by the data. But your own math shows that it this were so then it would also be supported by the data about trends in GDP and GDP per cap, which it is not. So what is the problem. Its the productivity figure.
Let's get the productivity figure straight first. I'm saying productivity is growing and will continue to grow. Are you disagreeing with that? If not, why are you discussing it? It seems like bad faith for you to keep asserting that I'm saying something when I've explicitly said the opposite.
The GDP curves I'm looking at are considerably different from yours, for example:
https://fred.stlouisfed.org/series/JPNNGDP
You write a bunch of math that concludes with what you started with. You started with the idea that productivity was growing slower than labor force was rising, from which immediately follows that GDP growth must then be negative. GDP per capita would also be falling unless population was falling faster than GDP. OK so you are back with you initial assumptions.
Is the bolded word "rising" supposed to be "falling", or is there still a misunderstanding I need to clear up?
If it is "falling", which is what my idea actually is:
Quote:What is the case for more debt? That's what I asked you about.
Are we talking about "why is more debt sustainable?" or "why is more debt desirable?"
From the standpoint of sustainability, a lower GDP growth rate means a lower natural interest rate. (If you disagree with that, let me know and we can discuss it.) With a lower natural interest rate, a larger debt can be sustained on the same interest payments. Therefore a larger debt is sustainable.
From the standpoint of desirability, as discussed at the links I provided, we need to start with the need to increase the labor force participation rate, or at least keep it from decreasing any faster than necessary, to maintain living standards. As discussed at the links I provided, that involves either or both of increasing incentives to work or reducing subsidies for not working.
The obvious way to increase incentives to work is to reduce income tax rates. Past a certain point, reductions in income tax rates will increase the deficit and thus the debt. That's a reason increased debt would be desirable.
The question of decreasing subsidies for not working is stickier. Subsidies for not working consist primarily of explicitly or implicitly means tested government benefits. These can just be decreased, which would actually reduce the deficit and thus the necessary debt. However, it's likely to be more politically palatable in many cases simply to remove the means testing. This obviously increases the deficit and necessary debt.
On balance, the easiest and most realistic ways to increase or at least maintain the labor force participation rate in the face of growing retirements likely involve increases in debt. Since maintaining labor force participation is necessary to sustaining living standards, that makes extra debt desirable.