Paul Krugman: prediction

Transcript context

…A few macro questions. How much do you worry about slowing population growth as a factor for an ongoing slowing of aggregate demand? Very much. There’s a little story here. Larry Summers became famous for advocating the idea that we’re facing secular stagnation. I had written about the same time, or even a month or so earlier, along the same lines, except what I wrote was very poorly formulated and unreadable. Larry came up with this crystal clear explanation of the issue. So he gets all the credit, and what’s even worse is he deserves it. So I get really pissed because I blew it on that one. I think that the secular stagnation–type stories, the stories that say that, with falling population growth, we have a hard time generating enough investment demand to use the desired savings, so that interest rates tend to be low even when times are good and tend to hit the zero-bound way too often, is a good story. It’s not 100 percent certain that it’s right, but I think it’s a good story. The first dress rehearsal for the difficulties that we’ve all had since 2008 was Japan. Japan famously is the place where declining working-age population kicked in well before it happened in the rest of the advanced world. I think it’s a big issue. Political risk aside, which we’ve already discussed, what do you think is the number-one danger to the global economy right now? Is it corporate debt? Is it China? Is it Turkey plus Argentina? Something else?…

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