As an economist, I have a difficult time forecasting job growth, interest rates, housing sales and prices more than 24 months out. Ditto commercial real estate (although I do believe that 2014 will be a GREAT year for commercial real estate: sales, rents and absorptions. So will housing).
That said, Bloomberg BusinessWeek (one of my weekly best reads) lists the latest 100-year forecasts from some notable top-10 academic economists. So here is essentially what they say:
- MIT economist – global warming will be solved by a motivated citizenry
- Princeton economist 1 – great suffering will come due to unregulated climate change
- Princeton economist 2 – IMF is based in Singapore, some benefits of global warming includes shipping channels through the Arctic Ocean.
- Harvard economist – global warming is a risk but solvable – but Canada and Siberia could be heavily farmed in the future
- Pompous Fabra University, Barcelona economist – have eliminated poverty in the world due to “natural growth and deliberate action.”
- Yale University economist – the Republican party in the U.S. is responsible for global warming and it is a political problem. Wealth disparities will result in the “Rich Nations” growing incomes just 1 percent per year in the next 100 years.
- Stanford economist – the global economy will be more linked and continue to grow
- Yale University economist – the need of an insurance policy that insures against insurance cost increases because of long-term changes in environmental risks (global warming)
- MIT economist – not certain how many can be supported at this standard of living in advanced countries
- Harvard economist – Climate change is the issue
As you can see, global warming/climate change are pretty much front and center for these academics. If that is the issue, then regardless what the U.S. and Europe do, it makes no difference if China, Pakistan and India do not do likewise.
First and foremost, remember that all people referenced in this forecast and those of you reading this forecast will no longer be around a hundred years from today. Including me. So it’s a really easy forecast to give you opinion. As we economists say, “Always forecast the future, just never give a date”. And that is essentially what a 100-year forecast is—zero accountability. But it’s easy to give a date 100 years out.
So what are my forecasts for the next 100 year? (and some of these may come into play within a decade, but they will still be around 100 years from now I bet).
- The global population will grow regardless – but my primary concern is fresh water. We never will run out of water. We just run out of cheap water. Whether it is stored water or reverse osmosis water (from the oceans), water is going to get really expensive. Too many areas in the world have yet to invest in lake storage systems to solve future demand issues. Water will eventually dictate where future job growth takes place. Water is our economic future. Was really surprised not one of the economists mentioned this. Trust me on this one. Mission critical.
- Taxes are going up massively on higher-income people as our political leadership strives towards a non-poverty society via wealth redistribution and services. We are heading towards a society where the majority pay no income taxes and they can vote in a Congress that abides by their needs for government services.
- The U.S. economy will suffer in job growth as more individuals no longer need to work given entitlements from federal, state and local governments. Give a person a reason not to work and they will not. Newton’s third law of motion states that for every action there is an equal and opposite reaction. Correct.
- Education is our future. And I do not necessarily mean a college degree. We need to focus on resources just to keep students in high school. Then on trade schools and apprenticeship programs. And college and university for some. A Federal Reserve Bank of Dallas study found that the average Texas College Graduate made 97 percent more than the non-college graduates. That is material.
- Am willing to bet the world will still be arguing about global warming (or cooling) 100 years from today. Our memories are pretty short term. Remember the first Earth Day in 1970 forecast global cooling due to the greenhouse effect. We were heading to an ice world according to experts at that time.
- The Democrats and Republicans will still dislike each other. And they will both say or do anything to get re-elected. Some things do not change.
- Real estate will be a primary investment – though housing costs will relegate even more people as renters. Some life-long renters.
To read the entire release from BusinessWeek, click http://www.businessweek.com/articles/2014-03-11/ten-experts-wild-guesses-about-the-world-of-2114?campaign_id=DN031114#p1
So what are your economic forecasts 100 years from now?