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The End of Economic Growth? Unintended Consequences of a Declining Population
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Journal Article
The End of Economic Growth? Unintended Consequences of a Declining Population
2022
Overview
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.
Publisher
American Economic Association
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