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Prepare developed democracies for long-run economic slowdowns.

Matthew G Burgess1,2,3, Amanda R Carrico4, Steven D Gaines5

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Developed democracies face slowing economic growth due to structural issues and global challenges. Preparing for fiscal and social stress requires a guided civic revival focused on well-being and shared identity.

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Area of Science:

  • Political Science
  • Economics
  • Environmental Science

Background:

  • Developed democracies experienced unprecedented economic growth over two centuries.
  • Macroeconomic forecasts predict a slowdown in 21st-century growth due to factors like aging populations, innovation shifts, and debt.
  • The COVID-19 pandemic and climate change may exacerbate this growth deceleration.

Purpose of the Study:

  • To analyze the potential impacts of slowing economic growth on developed democracies.
  • To propose strategies for developed democracies to navigate impending fiscal and social challenges.
  • To advocate for a 'guided civic revival' to foster resilience and well-being.

Main Methods:

  • The study synthesizes macroeconomic forecasts and sustainability science perspectives.
  • It analyzes structural reasons for projected economic slowdown.
  • It proposes policy recommendations for societal adaptation.

Main Results:

  • Slowing economic growth is projected for developed democracies throughout the 21st century.
  • This slowdown presents significant fiscal and social stress, with some indicators already visible.
  • Sustainability scientists suggest degrowth may be an environmental necessity.

Conclusions:

  • Developed democracies must proactively prepare for economic and social challenges.
  • A 'guided civic revival' is essential, focusing on inequality reduction, social integration, and enhanced well-being.
  • Investment in democratic institutions and non-economic drivers of well-being is crucial for future stability.