I have talked about my reluctance to invest based on demographic trends before. In almost all cases, trying to exploit demographic trends in your investments or even using demographic trends to forecast economic developments like growth or inflation is a fool’s errand. It sounds great in theory, but in practice, any demographic shifts are so small that they are easily dominated by cyclical developments.
Ive been intrigued by their arguments and press noise. Demographics have a sort of compelling naturalness to them (such as the idea that the markets, broadly, will be driven lower by Boomer retirement asset decumulation). FYI There are some good podcast interviews as well. Thanks for your analysis here which is excellent as always
You make a strong case for what you are saying. I agree with Goodhart and Pradhan that we will have a nearly global labor shortage. That means an increase in the *relative* price of labor. With neutral monetary policy that would mean an acceleration of inflation, but with rock-star central bankers monetary policy is never neutral: they are always trying to accomplish some political goal or other, usually "full employment," but they may also be trying to keep rates low so governments can borrow more. So I agree that the Goodhart and Pradhan conclusion is not necessarily what is going to happen - it is more likely than not, but that's not saying much.
Ive been intrigued by their arguments and press noise. Demographics have a sort of compelling naturalness to them (such as the idea that the markets, broadly, will be driven lower by Boomer retirement asset decumulation). FYI There are some good podcast interviews as well. Thanks for your analysis here which is excellent as always
You make a strong case for what you are saying. I agree with Goodhart and Pradhan that we will have a nearly global labor shortage. That means an increase in the *relative* price of labor. With neutral monetary policy that would mean an acceleration of inflation, but with rock-star central bankers monetary policy is never neutral: they are always trying to accomplish some political goal or other, usually "full employment," but they may also be trying to keep rates low so governments can borrow more. So I agree that the Goodhart and Pradhan conclusion is not necessarily what is going to happen - it is more likely than not, but that's not saying much.