I was just thinking about perpetual economic growth last night, and the fact that it is impossible to continue consuming more and more in perpetuity.
In Japan, they have had a lost decade. Deflation, very little economic growth, ageing population, and A BIRTHRATE OF 1.2.......
Are the Japanese actually worse off per capita? If their economy is still growing (albeit slowly) and their population is falling, do they not then have more GDP per capita?
The fact that their building industry is at a standstill, because they actually don't need new houses (population decreasing), may be exacerbating the slowdown in growth, because building houses is employment intensive.
But, there are less people each year actually needing a job.
Is this what we are all in store for?? Italy - birthrate 1.3, economy is stuffed and government is in debt.
What do Italy & Japan have in common?? High savings rates, and high government debt. High savings, because their population is ageing and more people are in retirement years. High government debt, because the government tries to spend its way out of a declining population.
If Australia, for example, stopped all migration, we have a birthrate of 1.6 I think (which would be lower without the MASSIVE cash handouts (middle class welfare) to families. We would then not have a housing shortage, but a SURPLUS. Where would we be then?? The government would spend 100% of GDP (like Japan) ie 1.1trillion dollars, trying to prop up the economic growth. Even though GDP per capita would be slowly rising.
Any thoughts out there?? Anyone know of any studies on economies in this context?