Ageing Populations

Abstract

The changes in demography, together with low investment and poor productivity, have been responsible for the whole of the decline in the trend growth rates of the UK and US economies. Living standards measured by GDP per person are given a boost when the population of working age grows faster than the total population. This favourable change in demography was the situation up to 2008. Until then living standards tended to improve faster than productivity. Since then the total population has been growing faster than the numbers of working age and living standards will now tend to grow less rapidly than productivity. The impact on prosperity has been sharp because we have moved from a favourable to an unfavourable situation.