THE ECONOMICS OF AN AGEING POPULATION – MACROECONOMICS ISSUES

The fear that market economies would stagnate had been present in economic thought for almost a century when, after the First World War, the decline in the rate of growth of the populations of the then more advanced economies brought it back to centrestage. In the 1920s, although migration had fallen to between a third and a quarter of the flows of the pre-war decades, the rate of growth of the population of European countries almost halved. The acceleration1 of the long-run decline in the birth rates was the main factor. The parallel decline in the death rates was not enough to compensate for its effects. The coincidence, in the next decade, of the lower population growth with the Great Depression2 and with the development of the analysis of the non-competitive market structures, justified the new stagnationist approach to long-run growth. This revival prolonged itself into the economic literature of the 1950s.