Without taking any side, MGI, in its latest study on long-term global growth prospects, notes: "In the developed world, including the United States and Europe, there are increasingly vocal concerns about stagnant median incomes and rising inequality. But recently Thomas Piketty (a well-known French economist) started a firestorm of debate with his analysis that concluded that declining inequality during the 20th century was an exception and that inequality will continue to rise in the coming decades."

The study captioned 'Global growth: Can productivity save the day in an aging world?' says: "Piketty advocates a progressive global tax on capital. Others, including Robert Shiller, have long warned about the inequalities produced by advanced technology. Schiller argues that we need to plan now and enact legislation to head off a 'disaster,' which he defines as a return to levels of inequality not seen since the late 19th and early 20 th centuries. He has suggested indexation of the tax system that would automatically raise taxes on the rich in the future if inequality becomes much worse."

It adds: "While perspectives vary on potential solutions for rising inequality, the reality is that, given slower population growth in the decades ahead, expanding global GDP will come from rising per capita income. In most regions, individual markets for goods and services will depend on increasing the purchasing power of consumers who are likely to expand their consumption as their incomes rise. Changes in average income-or per capita GDP-will not be enough to increase sales if most of the gains accrue to individuals whose needs and wants have been met. Broad-based income gains will therefore also matter for the growth of markets for many products and services."

MGI study reviews patterns of global growth over the past half century, focusing on the two key drivers of that growth-labour and productivity. Our broad finding is that, in the face of declining population growth that is putting pressure on the pool of available labour, the rate of GDP growth is set to be 40 percent lower than its rate over the past 50 years. To compensate fully for weakening labour growth would require productivity growth to accelerate by 80 percent from its historical rate. Drawing on five detailed sector case studies, we find that it is possible-but extremely challenging-to boost productivity growth by this margin.

Discussing limitations of gross domestic product (GDP) as measure of economic growth, the study says: "Designed to measure the physical production of goods in the market economy, GDP is not well suited to accounting for private- and public-sector services without an output that can be measured easily by counting the number of units produced. Nor does GDP lend itself well to the assessment of improvements in the quality and diversity of goods and services or to estimating the depletion of resources or degradation of the environment associated with production."

Transformative change in technology is not easy to measure using GDP, either, because so much of its benefit accrues to consumers. Perhaps most importantly, GDP was not meant to become an anchor metric for targeting national economic performance or a measure of national well-being when expressed as average per capita GDP, it adds.