A Declining Population May Not Always Be Bad for the Economy 人口递减未必损害经济
Matthew Lynn 马修·弗林
Most mainstream economists and policymakers take it for granted that a declining population is bad for the economy and we need to do all we can to reverse it.But the Japanese are starting to argue that it may not be true.Technology might mean that we need fewer people,while all the services required by the elderly might actually stimulate demand.If true,policies to combat an ageing population might be a big mistake..
Haruhiko Kuroda,the governor of the Bank of Japan,kick-started the debate with a speech that had the not-completely snappy title Demographic Changes and Macroeconomic Challenges.The consensus,the governor conceded,was that a falling population made it very hard for an economy to grow..
On one level,it is easier to see why that is true.After all,total GDP is just output multiplied by the number of workers,so if you have fewer people you automatically get lower GDP even if every individual produces the same amount,or even a bit more.Ageing populations are less innovative and dynamic,and all those old people cost a heck of a lot to look after.The net result？ Growth grinds to halt and government deficits rise and rise.Whichever way you look at it,it's all bad..
Kuroda's significant point,however,was this.Maybe that is not quite the whole story.It's possible,he argued,that an ageing population could be completely fine.Rapid progress in technology,such as robotics and artificial intelligence,means that we might need far fewer workers than in the past,while improving productivity.In fact,a shortage of workers will put pressure on companies to improve productivity..
At the same time,demand for labour-intensive industries for the elderly,such as healthcare and leisure,can boost demand and kick-start entrepreneurship.There is some truth in that,as well.The cruise-ship industry probably wouldn't be booming quite so much without so many retired people around..
On the financial side,as pensioners cash in their savings,that too can stimulate demand and drain the glut of capital that has built up while populations were younger.The conclusion？ A falling population is not necessarily as bad for the economy as usually assumed.More provocatively still,ageing nations might be able to outperform younger ones..
That is of course especially relevant to Japan,where the working age population peaked in 1995 and its total population in 2008.Unlike just about every other major country,Japan has not tried to stem its declining numbers through immigration,remaining relatively closed to outsiders..
Despite the recent influx of immigrants into Germany,its population is forecast to fall from 81m to under 70m over the next three decades.Italy is going the same way,with its population of 60m set to fall to 50m by the middle of this century.The UK's population is roughly stable,but that is mainly because of immigration.As we leave the EU,we will have to decide whether we want to accept a falling population,like Japan,or keep very open borders to maintain total numbers..
The conventional economic wisdom has been that we need rising populations and that without them growth will stagnate and welfare systems will be unsustainable.Investors fret over demographic trends and steer clear of countries with falling populations like Japan because they assume they cannot grow.And yet,in truth,this is uncharted territory.We haven't actually seen an example of an industrialised,wealthy country with a falling population before,so we can't say for certain what will look like.Maybe it won't be so bad after all？