Article
- Milken Institute Review
When more may be less
– While the state of national economies is usually measured by GDP or other measures of economic flows like consumption and investment, this research at the McKinsey Global Institute examines macroeconomic vitals from a different perspective: the collective balance sheets of 10 countries (Australia, Canada, China, France, Germany, Japan, Mexico, Sweden, the UK and the U.S.) that generate more than 60 percent of global income. And this view highlights a striking dual paradox that will be of increasing concern over the next decade. First, traditional capital and real estate continue to comprise most of net worth, even as national economies increasingly depend on intangible capital for productivity growth. Second, balance sheets have expanded rapidly over the past two decades, even as economic growth has ratcheted down, write Sven Smit, Jonathan Woetzel, Anu Madgavkar, and Jan Mischke in Milken Institute Review.