End of the Golden Age?

Alan Greenspan, former head of the US Federal Reserve for almost 20 years, has been in London promoting his book this week. As one of the world's leading economists he has a sweeping overview of the world and history. I went to hear him at an on-the-record session at Chatham House.  We have been living, he said, through the dramatic acceleration of globalisation as a result of the end of the cold war in 1989. Growth in developing countries had been twice that of the developed world. It had produced more than a decade of economic stability and expansion. But this was about to change he thought. The "Golden Age" of growth was ending as countries like China caught up - costs of production and wages were rising there, suggesting the days of cheap production and cheap exports to the West would come to a close.
The biggest economic issue facing the US and UK was the "economic tsunami" of the baby boom generation retiring - placing a greater load on the state and those still working. And the recent debt crisis and Northern Rock drama? Classic symptoms of a bubble in the market for loans. We never learn it seems. For a brief moment I felt I understood economics. But it swiftly passed.