Investors should pay more attention to demographics, says Chris Iggo of Axa Investment Managers. "Globalisation, capital flow arbitrage and the adoption of universal technology and production methods" may have led to a convergence in per capita growth rates in developed countries.
However, economies still "show very different aggregate growth rates with the swing factor being the differences in population growth". While this is good news for emerging markets with "higher rates of fertility and faster population growth", it presents problems for more mature economies with "unsustainable long-term public debt ratios", with Japan and Italy the two most prominent examples.
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