The End of Economic Growth? Unintended Consequences of a Declining Population
In many models, economic growth is driven by people discovering new ideas. These models typically assume either a constant or a growing population. However, in high income countries today, fertility is already below its replacement rate: women are having fewer than two children on average. It is a distinct possibility — highlighted in the recent book, “Empty Planet” — that global population will decline rather than stabilize in the long run. What happens to economic growth when population growth turns negative?
I am grateful to Sebastian Di Tella, Jesus Fernandez-Villaverde, Jeremy Greenwood, Pete Klenow, Chris Tonetti, and David Weil for helpful comments. The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research.