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Topic: Is it a problem if the population decreases while monetary inflation remains... - page 2. (Read 298 times)

mu_enrico

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The population as a whole is not the exact problem since there are many groups in it. The problem is with the one that contributes little or nothing to GDP, i.e., the unemployed. If this group (except housewives Grin

) suddenly disappears I think the country will be in better shape. The problem is if the population decreases because of force majeure, usually, all groups including the one that contributes a lot to the GDP (plus the infrastructure) will be affected. Therefore it can be bad for the economy.

Assumed full employment is achievable then there is no need to keep the monetary inflation, or should I say the effect would be negative. A country with unemployment problems will tend to incentivize birth control, conversely, the one that is in full employment will tend to incentivize reproduction.

Lorence.xD

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Quote from: hatshepsut93 on June 28, 2020, 04:59:23 PM

The lower class population are the biggest consumer and this contributes a lot in my opinion.

Quote from: hatshepsut93 on June 28, 2020, 04:59:23 PM

But inflation isn't the only thing that you should be worried about, and population decline can have other negative or maybe even positive consequences (opinions of economists here can vary).

I agree that there are other factors when it comes to inflation, I think the decrease is just one of them, remember the hyperinflation of German mark after World War 1, the war reparations took a toll to the masses of Germany, and in a sense, losing a war for conquest is a big factor for inflation.

Hydrogen

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For years, the media criticized japan's declining birth and population rates. The "official" solution to paying down deficits, inflation and debt was for populations to "grow" their way out. Deficits and debt would be "paid off" by future generations with greater numbers.

There have always been issues with that explanation. An estimated 50% of existing jobs are said to be vulnerable to human workers being replaced by automation, robots and machines. Growing populations put considerable strain on housing and real estate markets, as the growth of real estate development fails to keep pace with population growth demand. Negative societal issues relating to unemployment and weak job markets trend towards elevating crime and violence statistics. State run social programs designed to help people are also strained by population growth as governments increasingly tax work to subsidize non work. Negative trends relating to pollution and consumption of raw materials are also correlated with population growth.

There are many negatives associated with overpopulation and not much guarantees any growth trend would compensate for it.

hatshepsut93

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The population declines that are observable now are very small in relation to the whole population, it's usually 0.1-1%. Population is declining the fastest in the lower class, so not much value is being inherited, and it shouldn't cause a price inflation because it also lowers the demand for goods.

But inflation isn't the only thing that you should be worried about, and population decline can have other negative or maybe even positive consequences (opinions of economists here can vary).

jackg

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https://bit.ly/387FXHi lightning theory

Quote from: Upgrade00 on June 28, 2020, 03:46:23 PM

Yeah I think resources available will have a massive impact on the economy but the more people that work in a country the richer the rich can get as more people can work for them and labour is cheaper (it's also easier to separate yourself from the ground workers imo). But this probably tops out somewhere and we see countries thriving with populations as low as a few million with some as high as around 100 million (I'm not sure of any countries with a higher population as I'm not sure if there's something they can hide better).

Quote from: jackg on June 28, 2020, 03:23:34 PM

do a government normally incentivise reproduction/immigration if something like this were to happen

Highly unlikely that a nation would encourage an increase in population purely for the numbers, so the former is unlikely. It could however create an attractive environment for those looking to harness their skills (those educated in various fields) inorder to boost their workforce.
P.S; this post would better fit in the Economics board

Yeah moved thanks! Couldn't work out where to put it...
And of course fewer people means more government/society watching of each individual and a potential rise of the smaller number of people taking up a jobs of a higher role...

Just need to add by "immigration" I mean completely voluntary immigration where the person can return back to their home country whenever they like...

Upgrade00

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It has its pros and cons. The population of a nation makes up its work force and are essential in how much it can produce, but I think population density is a more important factor; how large is the population compared to the land area and job availability. A high number of people in a thriving economy would be effective as there are available jobs, while same number in a dwindling one would lead to high number of unemployment.

On the issue of how population and monetary inflation affects an economy, I do not think there is a direct relationship, but it could depend on the subdivision that's being lost, if a nation losses more of their educated population (in various fields) there would be less productivity.

Quote from: jackg on June 28, 2020, 03:23:34 PM

do a government normally incentivise reproduction/immigration if something like this were to happen

jackg

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https://bit.ly/387FXHi lightning theory

I'm using monetary inflation (based from monetary policy) and effective inflation (the price increase of certain "essential items" taken as an average increase in price.

Typically speaking is a population fall for a country or a certain area that uses the same currency a problem as the cost of standard items will increase and the value of the currency will fall because everyone might have more of it (other than a few that may still have nothing) potentially due to inheritance and a few other things.

Has something like this ever happened on a long term or do a government normally incentivise reproduction/immigration if something like this were to happen (causes of this could be anywhere from a nuclear explosion to chemical tests/contamination to a change in socioeconomic attitudes). I'm just wondering if this is a massive problem if this isn't corrected by a government.