{"id":123085,"date":"2021-08-03T21:50:14","date_gmt":"2021-08-03T16:20:14","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=123085"},"modified":"2021-08-11T14:20:05","modified_gmt":"2021-08-11T08:50:05","slug":"why-a-shrinking-population-is-terrible-for-a-modern-economy","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/why-a-shrinking-population-is-terrible-for-a-modern-economy\/","title":{"rendered":"Why a shrinking population is terrible for a modern economy"},"content":{"rendered":"<p><b>Source<\/b>:\u00a0<a href=\"https:\/\/epaper.livemint.com\/Home\/ShareArticle?OrgId=3819de9453&amp;imageview=0\" target=\"_blank\" rel=\"noopener\">Livemint<\/a><\/p>\n<p><strong>Relevance:<\/strong> This article explains the challenges associated with a shrinking population.<\/p>\n<h5><b>Synopsis<\/b>:<\/h5>\n<p>A shrinking population is a bigger worry than a heavy welfare burden<\/p>\n<h5><strong>Introduction:<\/strong><\/h5>\n<p>The US population was shrinking.\u00a0From the fertility rate of 3.2 in 1956, the fertility rate reached 1.6 in 2020. But the shrinking population has many challenges associated with it. For instance, the domestic business investment in the US also followed this decreasing trend.<\/p>\n<h5><strong>Challenges with the shrinking population:<\/strong><\/h5>\n<ul>\n<li><strong>The problem of ageing<\/strong>: There will be <strong>ever fewer workers<\/strong> to <strong>pay the benefits of an ever-larger pool of retirees<\/strong>.<\/li>\n<li><strong>Impact on the economy: <\/strong>The economy will face many issues with the shrinking population. Such as,\n<ul>\n<li>The economy will not have a growing supply of new workers<\/li>\n<li>New private investment has a harder time generating consistent positive real returns<\/li>\n<li>The real return on ordinary physical investment fall so does the interest rate necessary to keep the economy humming.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<table style=\"border-collapse: collapse; width: 100%;\">\n<tbody>\n<tr>\n<td style=\"width: 100%;\">Read more: <a href=\"https:\/\/forumias.com\/blog\/chinas-shift-from-one-child-policy-to-three-child-policy\/\" target=\"_blank\" rel=\"noopener\">China&#8217;s shift from &#8220;one-child policy&#8221; to &#8220;three-child policy&#8221;<\/a><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h5><strong>A shrinking population and the example of Japan:<\/strong><\/h5>\n<p>Japan faced all the economic hurdles of a shrinking population. Japan had no post-war baby boom.<\/p>\n<ol>\n<li>Despite a technologically advanced and export-oriented economy, the Bank of Japan\u2019s major policy rate fell steadily from 6% in 1991 to just 0.5% in 1995.<\/li>\n<li>Japan also <strong>experienced an enormous property bubble<\/strong> in the late 1980s. This is because when <strong>businesses cannot generate enough profitable investment to match the savings rate of an older population<\/strong>. This resulted in huge investments in land.<\/li>\n<li>Japan experienced an <strong>infamous \u2018lost decade\u2019<\/strong>, during which <strong>neither<\/strong> huge <strong>government spending<\/strong> <strong>nor<\/strong> persistently<strong> low-interest rates<\/strong> could fully <strong>revive the economy<\/strong>.<\/li>\n<\/ol>\n<p>These are the similar trend the US is also experiencing post -2008 crisis.<\/p>\n<table style=\"border-collapse: collapse; width: 100%;\">\n<tbody>\n<tr>\n<td style=\"width: 100%;\"><strong>Read more<\/strong>: <a href=\"https:\/\/forumias.com\/blog\/population-control-measures-in-india\/\" target=\"_blank\" rel=\"noopener\">Population control measures in India \u2013 Explained, pointwise \u00a0<\/a><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h5><strong>Challenges in increasing the population:<\/strong><\/h5>\n<ul>\n<li>An <strong>increased government spending on child care and other support for young families<\/strong> would <strong>offer only a modest boost<\/strong> in population growth.<\/li>\n<li>Meanwhile, the ideas that offer the greatest potential for population growth, such as <strong>comprehensive immigration reform<\/strong>, are the <strong>least politically feasible<\/strong>.<\/li>\n<\/ul>\n<div class=\"content-box-green\">\n<p><strong>Terms to know:<\/strong><\/p>\n<ul>\n<li><a href=\"https:\/\/forumias.com\/blog\/total-fertility-rate-tfr\/\" target=\"_blank\" rel=\"noopener\">Total Fertility Rate (TFR)<\/a><\/li>\n<\/ul>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Source:\u00a0Livemint Relevance: This article explains the challenges associated with a shrinking population. Synopsis: A shrinking population is a bigger worry than a heavy welfare burden Introduction: The US population was shrinking.\u00a0From the fertility rate of 3.2 in 1956, the fertility rate reached 1.6 in 2020. But the shrinking population has many challenges associated with it.&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/why-a-shrinking-population-is-terrible-for-a-modern-economy\/\">Continue reading <span class=\"screen-reader-text\">Why a shrinking population is terrible for a modern economy<\/span><\/a><\/p>\n","protected":false},"author":10311,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[8872,263,385,264],"class_list":["post-123085","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-demographics","tag-gs-paper-1","tag-population-and-associated-issues","tag-society","entry"],"jetpack_featured_media_url":"","views":{"total":8,"cached_at":"","cached_date":1698477489},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/123085","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10311"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=123085"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/123085\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=123085"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=123085"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=123085"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}