Working Paper: NBER ID: w26651
Authors: Charles I. Jones
Abstract: 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?
Keywords: economic growth; population decline; fertility rates; endogenous growth models; demographic changes
JEL Codes: E0; J11; O4
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Negative population growth (J11) | stagnation in economic growth (O49) |
| Negative population growth (J11) | decline in knowledge production (D29) |
| Negative population growth (J11) | decline in living standards (I31) |
| Decline in number of researchers (J11) | reduction in generation of new ideas and innovations (O36) |
| Reduction in generation of new ideas and innovations (O36) | stagnation in economic growth (O49) |
| Negative population growth (J11) | convergence of knowledge and income per person to constant values (F62) |
| Mitigation of negative population growth (J11) | higher long-run GDP per person (O49) |