Impact on growth and population.from Rogoff, Rossi and Schmelzing (AER, 2024):
source: Rogoff, Rossi and Schmelzing (AER, 2024).
They reject the idea that there is a strong and positive link between population growth and real interest rates, writing:
…With the exception of recent decades, aggregate population growth and real interest rates have moved structurally in opposite directions. The two series are positively correlated during major population growth shocks, such as during the Black Death of 1348 to 1351, the worst demographic “rare catastrophe” to hit an advanced economy since the Renaissance. During the period, global real interest rates fell sharply: but in the long run, these events leading to positive correlations remain a clear exception.
Definitely food for thought.
