Research Affiliates: 1% ... The New Normal Growth Rate?

November 16, 2012



  1. See Current Estimates Data, Population Estimates, United States Census Bureau.
  2. We think our reliance on GDP aggravates and encourages our current problems. GDP measures consumption. So, we think we’re gaining ground when we increase consumption, even if that consumption is funded by deficit spending or by increases in personal debt. See Arnott (2011a).
  3. U.S. Department of Commerce: Bureau of Economic Analysis.
  4. For each the G-7, fertility rates fell below replacement levels between 1965 and 1975. Among the BRIC’s, only India still has a fertility rate above replacement levels, and that rate is falling very fast. Fertility rates that are below replacement rates eventually lead to a population of zero (as John Calhoun’s rats demonstrated in the 1960s). But we’ll leave this puzzle for future generations to solve.


Arnott, Robert D. 2011a. “Does Unreal GDP Drive our Policy Choices?” Fundamentals (April).

———. 2011b. “30 Million New Jobs in 5 Years? Yes We Can!” Real Clear Markets (October 12).

Arnott, Robert D., and Denis B. Chaves. 2012. “Demographic Changes, Financial Markets, and the Economy,” Financial Analysts Journal, vol. 68, no. 1 (January/February):23–46.

Gordon, Robert J. 2012. “Is U.S. Economic Growth Over? Faltering Innovation
Confronts the Six Headwinds
,” NBER Working Paper No. 18315 (August).

Hanson, Gordon H. 2012. “Immigration and Economic Growth,” Cato Journal, vol. 32, no. 1 (Winter):25–34.

Kotlikoff, Laurence, and David Rapson. 2006. “Does it Pay, at the Margin, to Work and Save?—Measuring Effective Marginal Taxes on Americans’ Labor Supply and Saving,” NBER Working Paper 12533 (December).

Krugman, Paul. 2012. “Constant-Demography Employment (Wonkish but Relevant), The New York Times (October 6).

Mulligan, Casey B. 2012. “Do Welfare Policies Matter for Labor Market Aggregates? Quantifying Safety Net Work Incentives Since 2007,” University of Chicago Working Paper (January).

Ortman, Jennifer M., and Christine E. Guarneri. 2009. “United States Population Projections: 2000 to 2050,” United States Census Bureau.

Szegö, Giorgio. 2011. “Causes of the Economic Crisis: Can the Flap of a Butterfly Wing in Brazil Destroy the Coliseum … After 30 Years?” Journal of Risk Management in Financial Institutions, vol. 4, no. 3 (June):216–228.

©2012 Research Affiliates, LLC. The material contained in this document is for general information purposes only. This material is not intended as an offer or a solicitation for the purchase and/or sale of any security or financial instrument, nor is it advice or a recommendation to enter into any transaction. Nothing contained in this material is intended to constitute legal, tax, securities, financial or investment advice, nor an opinion regarding the appropriateness of any investment. Research Affiliates, LLC, is an investment adviser registered under the Investment Advisers Act of 1940 with the U.S. Securities and Exchange Commission (SEC).

CHRIS BRIGHTMAN, Director, Head of Investment Management, Research Affiliates, LLC.



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