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Suppose somebody who has not taken this course were to ask you what you have learned in it about the likely future of economic growth in the world economy. Write your answer in the markdown cell below after the TH20 prompt Although Economists know a great deal about the current state and scope of the economy through various statistics and relations, the state of the future economy is a bit speculative. Economists understand the preconditions and factors that contribute to successful long run growth and a prosperous future economy but ultimately must use their current understanding to steer the economy. In terms of demography, Economists understand and have learned, from the Malthusian Era until now, the importance of education, human fertility, and technological development. However, once standards of living and literacy reach a certain threshold, we see a drastic decline in population growth rates. This being said, parts of the world today have experienced a slowing down of population growth and in some areas may experience a negative population growth. Looking at the advancement of capital goods, Economists understand that capital goods and modern technology increases productivity when embodied in the correct goods. Thus, investment in the correct and most useful capital goods will in turn lead to a more prosperous economy. Continuing with the idea of technology, Economists know that the diffusion and development of capital goods is extremely important in that it leads to a higher efficiency of labor and higher standards of living. The future of technological advancement, relative to past generations, looks fruitful as the age of computers, communication, and data are beginning to flourish. Overall, Economists knowledge of the macroeconomy is still incomplete; however, they do understand that the ingredients for a prosperous economy include investment in capital goods, enforcing education to create a skilled a productive labor force (in combination with a low population growth rate), and advancement in technology. The future of the state of the economy, although promising given our current economic state and the factors mentioned above, then relies on government policy to reinforce these ingredients for prosperity, paving the path with the correct incentives for successful economic growth.
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