by David S. Waddell
You may recall from your freshman economics class that GDP = C + I + G + NE. Translation: A nation’s economic output equals consumption + capital investment + government spending + exports – imports. To grow an economy you must grow consumption, capital investment, government spending, and net exports in some proportion. However, when assessing a nation’s growth capability this equation overcomplicates things. More simply, we can combine a nation’s labor force growth rate with the productivity growth rate of that labor force. Therefore, to project a nation’s GDP path we only need some demographic data and some productivity projections.
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