How a trend towards a stationary population affects consumer demand

During the great depression of the 1930seconomists in both the United States and Europe tried to analyse the economic consequences of declining rates of population growth. Not only were birth rates in many industrial countries at the lowest levels ever, but they coincided with high rates of unemployment. Of the many economists who held that demographic trends were partly responsible for the adverse economic conditions, a prominent example was John Maynard Keynes. According to his so-called stagnation thesis, population growth stimulates investment demand in two ways: more people need more goods and services and, hence, more investment in factories and machinery; and with population growing, businessmen are more likely to regard their investment misallocations as less serious than when the growth is slow or nil.(1)A minority of writers were more optimistic about the economic consequences of slower rates of population growth. For example, Thompson argued that with a lower ratio of consumers to producers the population would enjoy a higher standard of living and the education of children should improve.(2)

Birth rate · Demographic economics · Depression (economics) · Development economics · Economic growth · Economic stagnation · Economics · Fertility · Geography · Goods and services · Great Depression · Investment (military) · Labour economics · Macroeconomics · Market economy · Political science · Population · Population growth · Sociology · Standard of living · Unemployment · Demography · Economic theories and models · Economic Theory and Institutions · Income, Poverty, and Inequality

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  Open Access•Allan Schnaiberg•Qualitative Sociology•1981

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