Aging and Economic Growth
For years, economists have fretted that rapidly aging populations in the developed world will suppress global economic growth. As reported in The Wall Street Journal, a new working paper released by the National Bureau of Economic Research challenges that view. The paper, authored by economists from MIT and Boston University, argues that aging population have not had a negative effect on the growth of per capita gross domestic product.
In fact, certain aging nations have experienced faster economic growth. Here’s the thing – the reason for this might be robots. The economists find that nations in which the population over the age of 50 is expanding faster than the 20 to 49-year-old population have been more likely to acquire robots to do work.
Those investments have rendered it easier for firms to replace department workers even when there are fewer younger workers available to hire. These findings counter the widely discussed secular stagnation theory put forth most forcefully by former Harvard President and former Treasury Secretary Lawrence Summers, who argues that the slowing growth of the U.S. labor force, due in part to large-scale Baby Boomer retirements, will suppress Americans growth potential.