We read about the Great Recession and the Secular Stagnation. And we bully Germany to boost private consumption. But Germany is suffering from a Secular Shrinkage. She is the only euro area country (except Portugal) where the population declined in the last five years.
It is therefore always entertaining to compare aggregate macroeconomic indicators with per capita ones. Take private consumption. Not unexpectedly, private consumption diverged between those countries that were entangled in major crises (Ireland, Portugal) or minor crises (Spain, Italy), and those that were not (Germany, France, among other).
Take per capita private consumption. Revealingly, Germans don't look so thrifty: the increase in per capita consumption comes out on top of the pack. By far. Voila!
Demographics is a hindrance to Germany, and an easily overlooked factor that distinguishes her from many other countries, except Japan.
PS: Cliff admits it. The main purpose of this post is to lay a paternity claim to the phrase. Of course Cliff googled "Secular Shrinkage", and while it doesn't have a great ring, at least it is not a recycled phrase as "Great Recession" turns out to be.
via:http://cliffeconomics.blogspot.in/2013/12/why-germany-is-different-secular.html
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