The rise of the middle class in India and Africa could prove a trump card for a global economy otherwise facing long-term headwinds to growth, said Vikram Mansharamani, the Yale University lecturer on financial booms and busts and the author of "Boombustology."
In a keynote speech Monday at the Pensions & Investments' Global Future of Retirement conference in New York, Mr. Mansharamani said China's difficult transition to a domestic consumption-led economy from an export-led model, technological disruption and demographic stagnation in most of the developed world are all working to leave supply outpacing demand.
That imbalance favors capital over labor, fueling growing inequality in countries around the world, which in turn is undermining support for globalization, Mr. Mansharamani said. And that, in turn, has led to a rise in protectionism.
Mr. Mansharamani said "a demand shock" from the growth of the middle class in emerging markets, led by India and Africa, should prove to be the tonic for what ails the global economy now.
"Those regions happen to be the fastest growing regions in the world today," and the growth of the middle class there is "about to explode," he said.