The end of economic growth? Unintended consequences of a declining population

Charles I. Jones (Stanford University)

GPI Working Paper No. 13-2020 and published in the National Bureau of Economic Research Working Paper series

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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 — highlighted in the recent book, Empty Planet — that global population will decline rather than stabilize in the long run. In standard models, this turns out to have profound implications: rather than continued exponential growth, living standards stagnate for a population that vanishes.

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