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Slowing Population Growth Impact on Economy

From The Huffington Post by Mark Gongloff:


The One Chart That Explains Our Grim Economic Future.  If you’re looking for somebody to blame for rising inequality, blame babies. Or, rather, the fact that there soon won’t be enough of them.

A drop-off in population growth is a big reason why global economic growth is going to slow down in the decades ahead, French economist Thomas Piketty points out in his new book, Capital in the 21st Century……

But a key component of Piketty’s rising-inequality forecast is a slowdown in economic growth, which theoretically means labor income will slow, too. If returns on investment stay higher than economic growth, as they typically have been, then voilà, you’ve got a growing gap between the rich (who own all the investments) and the poor (who get paid for their labor).

And the slower-growth future Piketty foresees will be at least partially the result of slowing population growth. Typically, population growth drives about half of all economic growth. Here is a very, very long-term chart by Piketty that shows what population growth has done since the birth of Christ, along with forecasts of what it is going to do for the rest of this century:

World population growth trends chart shows slowing.

From Huffington Post – Population Growth Trends

…. Meanwhile, middling population growth also makes inherited wealth more important, according to Piketty. When population is growing rapidly, the “old money” is spread thinner. Faster economic growth also means there’s more “new money” flying around, which makes old wealth less valuable. In Piketty’s view, the reversal of these trends is one reason why, in the next century, “inherited wealth will make a comeback,” leaving the 21st century looking a lot like the 18th and 19 centuries.’


More news and articles about population, international education, immigration and human development click through.

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