American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
The End of Economic Growth? Unintended Consequences of a Declining Population
American Economic Review
vol. 112,
no. 11, November 2022
(pp. 3489–3527)
Abstract
In many models, economic growth is driven by people discovering new ideas. These models typically assume either a constant or 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 that global population will decline rather than stabilize in the long run. In standard models, this has profound implications: rather than continued exponential growth, living standards stagnate for a population that vanishes. Moreover, even the optimal allocation can get trapped in this outcome if there are delays in implementing optimal policy.Citation
Jones, Charles I. 2022. "The End of Economic Growth? Unintended Consequences of a Declining Population." American Economic Review, 112 (11): 3489–3527. DOI: 10.1257/aer.20201605Additional Materials
JEL Classification
- I12 Health Behavior
- J11 Demographic Trends, Macroeconomic Effects, and Forecasts
- J13 Fertility; Family Planning; Child Care; Children; Youth
- O41 One, Two, and Multisector Growth Models