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The demographic deficit: How aging will reduce global wealth
As people in Japan, the United States, and the countries of Western Europe grow older, bank accounts in these nations, where most of the world's wealth is created and held, are likely to grow more slowly. Because people save less after they retire, and younger generations in their prime earning years are proving less frugal than their predecessors, savings rates are set to fall dramatically—with dire consequences for living standards in wealthy and poor nations alike.
The take-away: If no action is taken, the coming slowdown in global savings and the decline in projected financial wealth could depress investment and slow economic growth. A concerted effort to boost savings rates, shrink government deficits, and increase returns on financial assets can help avert this outcome.
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© 1992-2003 McKinsey & Company, Inc
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