One central fact about the global economy lurks just beneath the year's remarkable headlines: Economic growth in advanced nations has been weaker for longer than it has been in the lifetime of most people on earth.
The United States is adding jobs at a healthy clip, as a new report showed on Friday, and the unemployment rate is relatively low. But that is happening despite a long-term trend of much lower growth, both in the US and in other advanced nations, than was evident for most of the post-World War II era.
This trend helps explain why incomes have risen so slowly since the turn of the century, especially for those who are not top earners. It is behind the cheap petrol you put in the car and the ultra-low interest rates you earn on your savings. It is crucial to understanding the rise of Mr Donald Trump, Britain's vote to leave the European Union, and the rise of populist movements across Europe.
This slow growth is not some new phenomenon, but rather the way it has been for 15 years and counting. In the US, per-person gross domestic product rose by an average of 2.2 per cent a year from 1947 through 2000 - but starting in 2001 it has averaged only 0.9 per cent. The economies of Western Europe and Japan have done worse than that.
To make matters worse, fewer and fewer people are seeing the spoils of what growth there is. According to a new analysis by the McKinsey Global Institute, 81 per cent of the US population is in an income bracket with flat or declining income over the last decade. That number was 97 per cent in Italy, 70 per cent in Britain, and 63 per cent in France.
Like most things in economics, the slowdown boils down to supply and demand: the ability of the global economy to produce goods and services, and the desire of consumers and businesses to buy them. What's worrisome is that weakness in global supply and demand seems to be pushing each other in a vicious circle.
It increasingly looks as if something fundamental is broken in the global growth machine - and that the usual menu of policies, like interest rate cuts and modest fiscal stimulus, isn't up to the task of fixing it (though some well-devised policies could help).
In January 2005, as it does every year, the Congressional Budget Office (CBO) released its forecast for the US' budget and economic outlook over the decade to come. If the CBO's projections had come true, the US would have had US$3.1 trillion (S$4.2 trillion) more economic output in 2015 than it actually did - 17 per cent more. Even if the steep contraction of 2008-2009 hadn't happened, the shortfall would have been US$1.7 trillion.
As a matter of arithmetic, the slowdown in growth has two potential components: people working fewer hours, and less economic output being generated for each hour of labour. Both have contributed to the economy's underperformance.
In 2000, Mr Robert J. Gordon, a Northwestern University economist, published a paper titled "Does the 'New Economy' Measure Up to the Great Inventions of the Past?" It argued that the Internet would not have the same transformative impact on how much economic output would emerge from an hour of human labour as 20th-century innovations like electricity, air transport and indoor plumbing did.
It was a distinctly minority view in that apex of technological optimism. "People said: 'Productivity growth is exploding, Gordon. You're wrong; we're in a new age,'" Mr Gordon said. But as productivity growth slowed several years later, "people started to take my point of view more and more seriously". He offers the example of the self-check-in computer technology that airlines use. When introduced in the early 2000s, it really did mean greater productivity: Fewer airline clerks were needed for every passenger. But the gain was more a one-time bump than a continuing trend.
Mr Douglas Holtz-Eakin, director of the CBO at the time of the 2005 forecast and now president of the American Action Forum, said technology "just seems to be less special and more comparable to other forms of investments than it had seemed". The forecasters thought the average output for an hour of labour would rise 29 per cent from 2005 to 2014. Instead, it was 15 per cent.
But it's not just that each hour of work is producing less than projected. Fewer people are working fewer hours than seemed likely not long ago.
The unemployment rate is actually lower than what the CBO projected it to be a decade ago (it saw it as stable at 5.2 percent; it was 4.9 per cent last month). But the unemployment rate counts only those actively seeking a job. There were five million fewer Americans in the labour force - neither working nor looking - in 2015 than projected.
An analysis by the White House Council of Economic Advisers last year estimated that half of the decline in labour force participation since 2009 was caused by ageing of the population (which was anticipated in the projection), and about 14 per cent from the economic cycle. About a third of the decline was a mysterious "residual": younger people leaving the work force, perhaps because they saw little opportunity or viewed the potential wages they could earn as inadequate.
Weak productivity and fewer workers are hits to the "supply" side of the economy. But there is evidence that a shortage of demand is a major part of the problem, too.
Think of the economy as a car; if you try to accelerate far beyond the speed it's capable of, the car won't go any faster but the engine will overheat. Similarly, if the voluntary exit of people from the labour force and lower-than-expected gains from technological advances were the entire story behind the growth slowdown, there should be evidence the economy is overheating, resulting in inflation.
That's not what's happening. Rather, global central banks are keeping their feet on the economic accelerator, and that is not resulting in any overheating at all.
The distinction is important if there is to be any hope of solving the low-growth problem. If the issue is a shortage of demand, then some more stimulus should help. If it is entirely on the supply side, then government stimulus is not much use, and policymakers should focus on trying to make companies more innovative and coax people back into the workforce.
But what if it's both?
Mr Larry Summers, a Harvard economist and former top official in the Obama and Clinton administrations, watched as growth stayed low and inflation invisible after the 2008 crisis, despite extraordinary stimulus from central banks.
Even before the crisis, economic growth had been relatively tepid despite a housing bubble, war spending and low interest rates.
In November 2013, he combined those observations into a much-discussed speech at an International Monetary Fund conference arguing that the global economy had, just maybe, settled into a state of "secular stagnation" in which there was insufficient demand, and resulting slow growth, low inflation and low interest rates.
While the theory is anything but settled, the case has become stronger in the last three years.
But it may not be as simple as supply versus demand. Perhaps people have dropped out of the labour force because their skills and connections have atrophied. Perhaps the productivity slump is caused in part by businesses not making capital investments because they don't think there will be demand for their products.
Mr Summers, in an interview, frames it as an inversion of "Say's Law", the notion that supply creates its own demand: that economy-wide, people doing the work to create goods and services results in their having the income to then buy those goods and services.
In this case, rather, as he has often put it: "Lack of demand creates lack of supply."
Mr Summers' proposed solution is that the government sharply expand investment in infrastructure, which might provide a jolt of higher demand, which in turn could help the picture on supply - helping workers who build roads and bridges become reattached to the workforce, for example.
As it happens, increasing infrastructure spending is among the few economic policies advocated by both Mrs Hillary Clinton and Mr Trump.
Economic history is full of unpredictable fits and starts. When Mr Bill Clinton was elected in 1992, the Internet, a defining feature of his presidency, was rarely mentioned, and Japan seemed to be emerging as the pre-eminent economic rival of the US.
In other words, there's a lot we don't know about the economic future. What we do know is that if something doesn't change from the recent trend, the 21st century will be a gloomy one.
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