Demographic slowdown in U.S. may be one of the causes of the deep recession and slow recovery

First of all a healthy and happy New Year to everyone. With any luck and some good policies this year should be more prosperous for more people than 2013.  We are beginning the sixth year since the crash and financial crisis of late 2007 and 2008 . The American economy continues to grow and heal, unemployment although still elevated is gradually improving and prosperous expectations in response to favourable monetary policy and revived consumer spending are growing the stock and real estate markets. My undergraduate macro-economics professor Clarence Barber published several significant papers on population growth, the demand for capital and the origins of the great depression. (See Clarence Barber, Collected Economic Papers edited by A.M.C.Waterman, D.J. Hum and B.L.Scarfe, 1982) these papers were originally published in the American Economic Review, The Southern Economic Journal and the Transactions of the Royal Society of Canada. His argument which I always found quite interesting and useful was that the rate of population growth fell sharply in the U.S., Canada and Australia, New Zealand in the 1930s as compared to the rate that had prevailed in the previous decades. This fall was also true of Western and Northern Europe.Barber then linked this data to a Keynesian Harrod-Domar growth model and analysis of the linkages of population growth to building construction data, real estate activity and business capital investment plans. He concluded one of the papers with a quote from John Hicks’s Value and Capital . ” Nevertheless, one cannot repress the thought that perhaps the whole Industrial revolution of the last two hundred years has been nothing else but a  vast secular boom, largely induced by the unparalled rise of population.” I raise Barber’s important work because of an intriguing article a few days ago in the Washington Post written by Carol Morello on a slow down in the rate of the American population growth rate to below 1 %. In her article,Population Gains at Near Historic Lows she reports on the consequences of the recession as involving a slowdown in population growth. But it may well be that among the triggering mechanisms in the  overall economic environment that were linked to the bursting of the real estate bubble might well be the slow down in the population growth rate in the U.S. and Western Europe. Something which the wave of anti-immigrant hysteria is not likely to help. 

Advertisements

About haroldchorneyeconomist

I am Professor of political economy at Concordia university in Montréal, Québec, Canada. I received my B.A.Hons (econ.&poli sci) from the University of Manitoba. I also completed my M.A. degree in economics there. Went on to spend two years at the London School of Economics as a Ph.D. student in economics and then completed my Ph.D. in political economy at the University of Toronto. Was named a John W.Dafoe fellow, a CMHC fellow and a Canada Council fellow. I also was named a Woodrow Wilson fellow in 1968 after completing my first class honours undergraduate degree. Worked as an economist in the area of education, labour economics and as the senior economist with the Manitoba Housing and Renewal Corporation for the Government of Manitoba from 1972 to 1978. I also have worked as an economic consultant for MDT socio-economic consultants and have been consulted on urban planning, health policy, linguistic duality and public sector finance questions by the governments of Manitoba, Saskatchewan,the cities of Regina and Saskatoon, Ontario and the Federal government of Canada. I have also been consulted by senior leaders of the British Labour party, MPs from the Progressive Conservative party, the Liberal party and the New Democrats on economic policy questions. Members of the Government of France under the Presidency of Francois Mitterand discussed my work on public sector deficits. I have also run for elected office at the municipal level. I first began to write about quantitative easing as a useful policy option during the early 1980s.
This entry was posted in business cycles, Canada, fiscal policy, Keynesian multiplier, U.S., Uncategorized, unemployment and tagged , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s