Why Aging Populations Hurt The Global Economy

[@Vahtacen]

One issue with ageing demographics which I have never seen discussed is how it will impact the central bank's ability to reduce interest rates to increase consumption. Currently, if you reduce interest rates, people overall save less and spend more, because saving has lower returns. However, retirees or those close to retirement often have fixed savings goals because they live off or intend to live off savings in their advanced years. If this is true, there may come a point (when the overall population becomes very old) where lowering interest rates may drive *increased* savings, as older workers have to save more in order to meet their fixed savings goals. I have never seen this discussed anywhere - perhaps I am missing something, but this seems like something which could have significant impacts on the ability of central banks to regulate the savings/consumption mix. (The best example of this is Japan, where people save a LOT despite zero/negative interests rates. However, that may just be cultural)

[@tomm.8892]

Unfortunately, the "world view" of GDP growth and increasing consumption pushes human to activities that are not sustainable.

[@bobriemersma]

Savings, pensions, retirement portfolios, Social Security Trust Fund, etc. are the bubble that financialized markets have been riding on parasitically for decades. As the rightful owners turn to use their retirement security all we hear is "boo hoo" from those economic parasites who got away with taking advantage and undermining the stability and growth of nest eggs.

[@toomanymarys7355]

There is no sociL security trust fund.

[@stewiesaidthat]

@@toomanymarys7355 the government can just raise taxes to pay back the trust fund. If the stock market tanks, everyone's savings, pensions and IRA's are drastically reduced.

[@justinokraski3796]

Parasitically? Booomers were free to put their money in their mattresses

[@jeffw8218]

It’s because they don’t work, and haven’t saved as much money as they need to not be destitute. They also REFUSE to live in multi-family or generational-family housing. If you didn’t save enough for retirement, then it is NOT the younger generations responsibility to care for you. We should do it out of niceness, not government mandated compulsion.

[@NotShowingOff]

While I like the research, this doesn’t really shed light on any problems. In my view too much responsibility is on the individual. Very little universal social resources. Very little trust. The consequences on a macro level are that many ppl are unemployed or underemployed and their wages don’t match the living standard. These ppl are going to age without finding proper opportunities. And governments and corporations are complaining about demographic decline, but they are the ones making living in the present unsustainable

[@gianlucag100g]

True

[@BoonTobias]

I don't think it trends towards zero. Sharp population decline so far has been limited to the 30 below age groups in Japan. The real party starts when the 35-55 prime age work group starts collapsing. A cataclysm is coming. Zero growth is just the calm before economic annihilation.

[@TheMagicJIZZ]

People do die

[@BoonTobias]

@@TheMagicJIZZ correct. Except the numbers show they'll grow older faster than they'll die. Ageing and declining population. Alone, neither is an issue. Combined = cataclysm

[@deniskutman7346]

Great presentation and a very compelling and logical thesis. Given your statement that the aging demographics will result in lower real economic growth, does this assume that society will not be able to counteract these demographics with significant increases in productivity through technology adoption in the form of automation, artificial intelligence, machine learning, etc? Thanks!

[@EPBResearch]

Technological innovation can help long-term growth. I would encourage you to think about innovation that increases the demand for resources (labor, commodities) and innovation like automation that is designed to reduce the demand for resources (labor).

[@handlemonium]

@@EPBResearch Absolutely! I see all of the following industries being backed by steady growth over the next 15-20 years: *> FinTech* (AI/ML assisted workflows & services, blockchain applications including & beyond crypto, etc.) *> IT hardware & software* *> Telecommunications* *> Aerospace* *> Nuclear & renewable energy* *> Electric vehicles* *> Additive Manufacturing* *> Arms and Defense hardware*

[@rephaelreyes8552]

How am I supposed to find companies with organic growth when speculation is baked into the system with most stocks

[@dansmith5087]

Great analysis and projection. I appreciate your work.

[@EPBResearch]

Thank you, Dan!

[@pranavswaroop4291]

@epbresearch love your work but I have a request - in the future could you please try to include data about India as well? We are about a fifth of the world's population and the fifth largest economy as well.

[@Clubrat]

Yes this is the opposite of the 1970s.

[@williamhoffer9277]

Great analysis!

[@ivancho5854]

Brilliant. Thank you Eric. I think that the next decade will see governments around the world holding down interest rates while inflation erodes debt. Lifespans will decline as stresses on the elderly increase. The young will have increased purchasing power as labour becomes scarcer and wages rise, which will hopefully increase the birth rate. Young people may realise that saving for retirement is impossible in this environment and children once again become essential to look after parents in old age. Unfortunately this may become our dystopian future reality.

[@justinokraski3796]

This coincides with an aging and growing population of young males who remain virgins and will likely not have kids (at least, in time to replace the next retirement wave)

[@jrossrmg]

Quality video. Would love to see more. Thank you

[@mmkmkdhdbrb]

Video on australia population growth vs united states

[@robertphillips2983]

Good stuff, very cogent presentation. Thank you.

[@EPBResearch]

Thank you for watching, Robert!

[@ssssaa2]

I personally am quite worried about the low fertility rates globally. Even in the last 10 years they have fallen almost everywhere to completely unprecedented lows, and I don't think it's bottomed out. Korea now has a fertility rate of 0.7, meaning each generation at this rate will be 1/3 the size of the one before it. GDP will start to shrink every single year and at a good pace if that is sustained in that country well before the end of this century.

[@igorcurumim]

excelente video!!

[@champstar9669]

What happens if inflation *exceeds* the predicted correlation with demographics at 12:30? It would seem the effect would be orders of magnitude worse.

[@DanielleParkpodcasts]

well articulated.

[@EPBResearch]

Thank you, Danielle!

[@1MinuteFlipDoc]

Garbage in, garbage out!

[@alexander15551]

But, we can offset some demographic drags by continuing innovation an increasing efficiency? Our real gdp growth has outpaced population growth over the years

[@egortitov9494]

Also fertility rate is a nice indicator.

[@thegoru0106]

Great video.

[@EPBResearch]

Thank you, George!

[@aegisofhonor]

now one caveat to these figures is that people at older ages are spending more at those older ages then in the past, with more consumer goods available and more pressure to buy those consumer goods as well as a significantly more consumer oriented aging population, they will tend to spend as they get older, maybe not as much as they did when they were younger, but certainly more then their parents or grand parents.

[@toomanymarys7355]

My grandparents went to Alaska and Hawaii for the first time in their old age. Europe, too. They also bought a computer in the 1990s.

[@JinKee]

10:00 so this is why ben bernanke was so afraid of a deflationary death spiral

[@justinokraski3796]

Population decline began decades ago

[@Brandon-cc4ft]

I disagree that Economic Growth will converge to 0%. The goal of modern humanity is to create a system that satisfies Maslow’s hierarchy of needs as efficiently and sustainable as possible. The issue with this goal is that no automatic system can satisfy any needs beyond the physiological needs. Automation can automate supplying you with food, water, and all other physical needs, but it cannot determinedly supply you with physical safety, shelter, love and belonging, etc. I mention this because as the world’s population rapidly decreases if we do not create some hybrid system that can satisfy the majority of Maslow’s hierarchy, our society will collapse. There will be non-modern humans to eventually rebuild everything, but this cycle will continuously repeat until it is done right. No matter how far we travel into the universe, society will continuously collapse until we find that system. Economic growth will not converge to 0%, it will either be cyclic between positive and negative growth or if that system is found, will be divergent.

[@toomanymarys7355]

Maslow was wrong, and his pyramid is almost upside down.

[@josemuzquiz7146]

There's a easy solution to this

[@avernvrey7422]

An older population will not spur growth. A trend towards zero sounds completely reasonable.

[@Summer-nm9si]

I just have one suggestion to make. All this data explanation is good but are you sure that millennials are making families Or even Gen z for that matter? I think you should add one more data on how much percentage of millennials are making families. Because this would be the actual data that will impact on 10 to 15 yrs later. Because around me there are plenty of millennials but none of them are married and no kids.

[@justinokraski3796]

Yes there is a terrifying trend of male virginity rates reaching increasing numbers at older ages (like a substantial part of the male population are now virgins until at least 27, while women are at 23) that will lead to declining birth rates and social instability

[@affinity1]

What about those aged 25-31 in prime household formstion years? Per Logan Mohtashami research.

[@toomanymarys7355]

Not getting married until 30. Fertility impaired.

[@justinokraski3796]

Even once they get married, a lot of them just have cats for kids because no one wants to bring children into this hellhole of a world

[@SC-sh6ux]

It looks like mothers are the true creators of any and all growth. But the world’s mothers are finding mothering to be prohibitively expensive. What percentage of economic growth is shared with mothers?

[@1MinuteFlipDoc]

it's the fathers that give the mothers the money, and the fathers are finding it prohibitively expensive to fund the mothers (red pill).

[@winstonsmith6204]

@@1MinuteFlipDoc facts.

[@toomanymarys7355]

It's not the mothers. It's literally the children from 2 parent households. So punitively tax those who are married with children, and abolish easy divorce.

[@wageslave387]

No, oil is. And we are all out...

[@justinokraski3796]

Many potential fathers are being overlooked because of dating apps selecting for only the best for hookups, turning those would-be fathers into worker drones that exist only to prop up the economy for the bastard children of the 1% of guys that are attractive enough

[@AndreasSvenska]

This argument contains an awful lot of hooey. SS and medicare are amply funded. I am an investor and I feel like I am getting the “free ride”

[@jimbobhaha]

Biblical Polygyny 🎉

[@jamesmclean9026]

The different leadership's of the world have destroyed hope for the future. Thus causing the down sizing of family's and children

[@JB-kx9bx]

As long as per capita gdp remains stable.

[@toomanymarys7355]

It won't.

[@erikowren7894]

Enter Tesla BOT… Elon is not Dumb…

[@JinKee]

can automation (fourth industrial revolution) fix this demographic vortex by creating AI that buys things and takes resources out of the market? “a tunnel has two ends”

[@avernvrey7422]

broken window fallacy? Society isn't better off with its resources simply removed (by AI programs that would... what? store or dump? the resources/products).

[@willrocksBR]

You didn’t really think this through, didn’t you

[@topol6]

Luke Gromen territory right here.

[@omeryehezkely3096]

The western world is a dying old man. We are just witnessing a slow flip in world dominance.

[@toomanymarys7355]

Nope. Masses of poor, corrupt, inefficient, and unproductive people do not make for dominance. There is a reason that the Islamic world fell into backwardness when the Christian and Jewish and Zoroastrian populations declined too much.

[@omeryehezkely3096]

@@toomanymarys7355 The Islamic occupation of Europe is already in progress. Give it 100 years and the chancellor of Germany will praise Alla at the beginning of each speech.

[@mitsospiros]

Nice. But we can slow this down and even reverse this trend with much higher immigration.

[@1MinuteFlipDoc]

truth. US, Canada, most of Europe will do exactly that. Japan isn't big on letting foreigners become citizens so they will have a problem.

[@runningfromabear8354]

@@1MinuteFlipDocUntil you run out of immigrants. Poorer countries birth rates are dropping fast. And immigrants adopt the birth rate of their residence. Human capital isn't unlimited.

[@toomanymarys7355]

Low economic value immigrants are a massive drag on an economy that is developed and has many social welfare programs. Cut all welfare and make everyone fund their own public education, and they contribute positively.

[@jamesmclean9026]

John Hage prophesied this in 87,I think

[@XiaoPangZi]

111th comment! Ohyeeeah

[@doctorshawzy6477]

bring it on..the planet needs a population of 500 million at most...

[@toomanymarys7355]

Make sure you take the euthanasia route as soon as you hit 60, please.

[@johnrotten968]

I thought the millennials demographic was as big as the boomers?

[@EPBResearch]

Hi John, While this might be true, the old-age dependency ratio is rising in the United States and other major economies. The old-age dependency ratio measures: "the ratio of the number of people older than 64 relative to the number of people in the working-age (15-64 years)" This ratio was 18% in 2005 and has increased to 25% in 2020. The regular age dependency ratio is rising as well. In 2000, the working-age population (15-64) was about 66% of the total population. In 2010, this ratio was still about 66%. At the end of this decade, it will be 61%, a steep drop. There are a lot of ways to slice this data but it's tough to argue robust demographics for the major economies moving forward.

[@toomanymarys7355]

That means net zero growth.

[@justinokraski3796]

Only in the US

[@gordeng4001]

I disagree, older people like myself consume way less resources then some like the millennials. We also have a lot of the money that we have made through our lives and paid social security most of our lives which we are just getting some of that back! While still feeding and supporting the nasty millennials! Who don't want to work anyway! If there's any drain on the economy, resources or the growth, it's the Young that most of the resources and don't want to work. Period!!!

[@toomanymarys7355]

Explain Japan. Social Security is pay as you go. Nothing is saved for you. You paid for the Greatest Generation's retirement. Now the Xers are paying for you. It's a ponzi scheme. You not consuming is a huge drag on the economy, too.

[@gordeng4001]

@@toomanymarys7355 true! But when you're working for a living you're not asked if you want to join the Ponzi scheme, the government just steals your money! Just because you don't use as much resources when you're older doesn't mean your money doesn't go towards your children, the next generation and your grandchildren, the generation after that. You don't get to leave with it. At least my generation wanted to work, and we worked for what we got! Way on like the millennials!

[@bobore7061]

He did say that at 4:23 that older people consume less. Also most millennials work so I’m not sure why you are calling them nasty. You need to get out more! Get some oxygen too your brain.

[@gordeng4001]

@@bobore7061 you must be a millennial so screw off!

[@justinokraski3796]

The leaded gasoline from your youth has returned to rot your brain and make you shake your fists at clouds. It’s not that you’re consuming as much as you’re not *producing*