In hard currency areas, however, like the $ £ Sterling and the euro, reserves are likely to stabilize. We have already seen what has happened since the introduction of the euro. In the longer run – perhaps in another 25 years to 50 years – the world may move to only a few major currency areas, as some pundits have predicted.
Over these years, we benefited from a noticeable pick-up in productivity growth, partly due to a period of substantial economic reform. However, the story over the past decade is quite different, with productivity growth being noticeably slower.1 The good news is that this did not lead to slower growth in our living standards (this is apparent in the two lines moving apart gradually).