We have assumed growth will continue indefinitely as it has since the first Industrial Revolution in the 1700's.
This is part of the mythos of Silicon Valley - continued innovation and continued growth forever!
A National Bureau of Economics Research paper suggests that growth is not historically the natural order. There was no growth in GDP per capita before 1750 and once the three Industrial Revolutions (steam, electricity, computers) permeate the world population there will be (already is) a slowing down and things may return to a stable GDP per person as it was before 1750. The paper is here:
(or search on "NBER Working Paper 18315")
From the paper abstract:
"A provocative “exercise in subtraction” suggests that future growth in consumption per capita for the bottom 99 percent of the income distribution could fall below 0.5 percent per year for an extended period of decades."
'But aren't we growing again? Isn't it all around us? What say you to that, dolorous fellow?'
Well, we may currently be in a bubble ("what? - A-GAIN!?") witness the Russell 2000 which is small cap stocks. After a downturn the first to recover are big cap stocks (safest), followed by mid-cap, followed by small caps like the Russell 2000. Available here (in a log scale so it is more extreme than it at first appears):
The Federal Reserve is printing massive amounts of money to purchase mortgages and bonds to help the economy recover. This may not be having the intended effect of making people and companies buy more goods and get manufacturing and retail going again leading to higher employment in turn leading to more purchasing. Instead all this new money may be going into "asset bubbles" Assets are housing and stocks.
This doesn't mean things will collapse as they did in 2008. The economy may just stop growing for a while to let inflation whittle down "real" prices. Or it may all collapse. Or something inbetween. No one knows.
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