Many observers seem to be pessimistic about economic prospects, both in the near term and the longer time horizon. Many speak of secular stagnation [a condition of negligible or no economic growth in a market-based economy], whether due to demographic, technological, or sociological reasons. Paul Krugman in his interview with Ezra Klein actually talks about the next five years, but only in terms of income inequality, which he does not seem optimistic will be overcome.
The past half decade has been dominated by the hangover from the Great Recession, which most Americans say is still going on, even if it technically stopped early in the half decade. We know this is due to stagnant real wages and slow job growth, even in the more rapidly growing U.S. — but I suspect that over the next half decade, we shall come out of the Great Recession's hangover, even if what goes on does not turn into an outright boom.
In the U.S., a major change [over the next 5 years] may be less broadly demographic and more to do with generations.
The Greatest Generation will not totally die out, but effectively they are done for. Their numbers are rapidly dwindling, and they are all going to be very old, over 85 and more. To the extent that this milestone coming up marks the end of a long 20th century, it may be in the final passing of any influence of this generation.
The Silent Generation will pretty much be retired by then, although still around in numbers. They often get ignored as the more numerous ones surrounding them have dominated the picture, but they have been a curiously stabilizing force in U.S. society, and probably under-appreciated. But they will turn into retired geezers, if not ready for the nursing homes like the remnant of the Greatest Generation.
The noisy and pompous Baby Boomers will be retiring in droves. The majority of Baby Boomers will still be working at the end of the half decade, but most of the front end crowd will be retired, if inevitably likely to still be as noisy and attention-demanding as they are now, even if they find others less willing to grant them the attention they think they so richly deserve.
The Gen-Xers are already pretty much all into middle age, although many of them still under 40 may be denying it. By the end of the half decade, they will no longer be able to deny it. They will become our dominant middle aged group, and given what we know about age and happiness, they will be probably be so miserable they will not be able even to be "ironic" anymore.
Which brings us to the rising Millennials, those children of the Baby Boomers, whom they both resemble and resent. I kind of think they are just late stage Gen-Xers who are in denial and trying to be in with the cooler and younger Millennial crowd. It may well be that their large numbers and rising skills will be the driving force that will overcome the [economic] stagnation that so many are prophesying, whether it is due to coming up with those growth-generating technical innovations, or just through sheer energy and enthusiasm.
Which brings me up to a question and point almost nobody is talking about: who is the next generation? We do not have a name for them yet, and they do not yet seem to be forming an identity for themselves either. But I am reasonably certain that current undergrads are probably the last round of the Millennials. If current freshmen are not the front end of the next generation, those in high school are, and those in middle school and elementary school will certainly be fully part of it.
So, I forecast that a major development during the next half decade is that the successor generation to the Millennials will emerge and begin to stake out their own identity, whatever that is, and I shall make no effort to forecast what that will be or what they will do. But, perhaps they too will contribute to overcoming secular stagnation and keeping the world economy going.
Good night and happy new year and happy new half-decade, everybody, :-)!
* EDITOR'S NOTE: This post was created from a collection of excerpts that were taken from another post titled "Looking Forward To The Late Twenty-Teens" by Barkley Rosser (an older Baby Boomer) at the website Econospeak. Now read this related posted about "tertiary education" by Tim Tayler at his website Conversable Economist: “The U.S. shows almost no intergenerational gain in education levels, and is second from the bottom in such gains.” So then, good luck with this (as of yet un-named) next generation who's currently in high school and who is supposed to save the world. (And happy new half-decade from me as well.)