The SAFE Policy Center organizes a web seminar on
The Great Demographic Reversal
Watch the video on our Youtube channel
Charles Goodhart (London School of Economics)
Manoj Pradhan (Talking Heads Macro)
Moderator: Hans-Helmut Kotz (Leibniz Institute SAFE and Harvard University)
During the course of the last generation, two developments – the rise of China and the re-integration of Eastern Europe into the global value chain – implied an enormous increase in effective labor: a massive positive supply shock. Moreover, in advanced economies demographics (baby boomers entering labor markets as well as increased female workforce participation) amplified this trend. Combined with the preparedness to reduce barriers to trade and allow for ever deeper integration of markets, these economic background conditions spelled reduced bargaining power of labor, a commensurate increase in the share of capital and hence strong disinflationary forces. As an upshot, nominal interest rates fell as well. This "tendance lourde", however, is now reversing. That is the diagnosis which Charles Goodhart and Manoj Pradhan defend in their just published "The Great Demographic Reversal". And this trend-reversal comes with potentially enormous consequences: for pension systems, health care as well as central banking and fiscal policies.
Professor Charles Goodhart was in charge of the London School of Economics’ research program in financial regulation until recently. From 1985 until his retirement in 2002, he has been Norman Sosnow Chair of Banking and Finance at the LSE. There he also founded in 1986, with Mervyn King, the Financial Markets Group. Before that, he had served at the Bank of England, becoming Chief Adviser in 1980. Between 1997 and 2000 he was an outside member of the BoE’s newly-formed Bank Monetary Policy Committee. At the end of 2009, he started consulting with Morgan Stanley, a position from which he resigned in 2016, at the age of 80. Professor Goodhart is a highly prolific and practically most influential academic, with numerous important publications to his credit, amongst them Money, Information and Uncertainty (1975/1989) or The Central Bank and the Financial System (1995).
Manoj Pradhan is the founder of Talking Heads Macro, an independent macroeconomic research firm. Manoj was previously Managing Director at Morgan Stanley where he led the Global Economics team. He joined Morgan Stanley in 2005 after serving on the faculty of the George Washington University and the State University of New York. Manoj has a PhD in economics from the George Washington University and a Masters in Finance from the London Business School.
The web seminar is a part of the SAFE Policy Lecture Series aiming at fostering debates on policy-relevant issues.