eventually reduce the workweek to 15 hours and we would all have far more leisure time, his predictions did not quite pan out. While prosperity did arrive, we still do not live in a leisured society, thanks to human nature and our ambition and drive meaning that we always want something more.
HOW DOES US POLICY ON MIGRATION AFFECT ECONOMIC GROWTH? Migration and citizenship are controversial topics in the US right now, with President Trump’s policy, particularly in Minneapolis, attracting criticism. Without directly referencing this, Dr Sheard addressed concerns about future US population demographics and the role of immigration. He also pointed out the
resilience of the US economy to short-term political decisions, explaining how it is driven by powerful sectors like Silicon Valley and Wall Street, and the amazing infrastructure of US cities. “What our grandchildren will is actually an incredible
inherit
stock of capital and physical assets, like Brooklyn Bridge, and all of the infrastructure and also all the scientific knowledge, the technological knowledge, and all the institutions that former generations have created,” he said. Despite frequent pessimism in
the news around some aspects of US policy, Dr Sheard was upbeat about the broader economy in the long term. GDP sits around $31 trillion, making it the largest and most productive economy in the world. Growth itself comes from three essential ingredients: labour, capital, and productivity, and immigration plays an especially important role in that equation. “Economists like migration.
Migration has driven the Australian economy and the US economy,” he said, calling for a review of the immigration system which was currently something of a mess.
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“The US would definitely benefit from having a more streamlined immigration system that worked and had fewer piles of paper.” A steady inflow of talent,
ambition, and entrepreneurial energy will continue to fuel expansion, he said. Many of the world’s richest individuals accumulated their fortunes by building transformative companies and providing platforms used daily by millions of people. Yet for entrepreneurs such as
Elon Musk, Mark Zuckerberg, and Jeff Bezos, their wealth is essentially just stock market capitalisation, he explained, because that wealth reflects investor expectations about the future profitability of those companies. Those profits ultimately depend on future customers, many of whom have not even been born yet. “Part of the wealth of the uber
rich actually accruing it from the expectation that people who have not yet been born will buy their products,” he explained.
TARIFFS, TRADE & THE LIMITS OF POLITICAL POWER Trade policy has returned to the political spotlight in recent years, particularly through tariffs designed to reshape global supply chains, but Dr Sheard explained that economists remain sceptical. “Economists don’t like tariffs
because, tariffs are a tax on imports, and ultimately, the cost will fall on final consumers,” he said. The idea that trade deficits represent economic weakness is also a misunderstanding, he said. “Imports are exports. It just depends on which chair you’re sitting in.” While governments can
influence the economy, they do not have full control over it. “This is not a command and
control economy,” Dr Sheard explained. “This is the most capitalist market orientated economy of the globe.”
WHAT ARE THE RISKS OF POLITICAL DECISIONS NEGATIVELY AFFECTING MIGRATION & TRADE? Asked by Relocate Global whether political decisions taken now or in the future could affect the long term growth of the US economy, Dr Sheard explained that he was sceptical that such decisions would have a negative effect in the long term. Addressing some of the concerns around recent
policy
decisions he explained: • Investment in
public
services: Reducing investment can slow capital accumulation and productivity growth. Economists consider capital accumulation one of the three pillars of long- term economic growth (the others being workforce growth and productivity).
• Migration & talent flows: Immigration is critical for workforce growth, innovation, and entrepreneurial activity. Policies that restrict talent inflow could reduce efficiency, slow technological progress, and weaken the innovation ecosystem (eg Silicon Valley relies heavily on global talent). • Economic
resilience: The
US economy has been stress- tested through events like the 2008 financial crisis and Covid-19, showing strong fundamentals such as rule of law, strong capital markets, and innovation. However, long-term mismanagement of policy could undermine this resilience.
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