Demography, Economic Growth, and Capital Flows

We are living through a demographic revolution. Longevity continues to increase throughout most of the world, at a rate of more than two years a decade. Birth rates continue to fall throughout most of the world, from their global peak in the mid-1960s, but with large differences from country to country. For both quite different reasons, the world population is ageing rapidly, with the median age (half older, half younger) rising from 29 years in 2010 to a projected 36 years in 2040. Thus while the world’s population will grow by an additional 2 billion between 2010 and 2040, its geographical and age structure will change dramatically. Some countries, most notably Russia, Japan, and Germany, are already experiencing a decline in total population, despite increasing longevity. Many others, especially in Europe and East Asia, can be expected to grow only slowly. Some of the poorest countries, particularly in sub-Saharan Africa but also including Afghanistan, Yemen, and Guatemala, continue to grow rapidly in population. Among the rich countries, the United States stands out as experiencing more rapid population growth; and among the emerging markets, China stands out as ageing with exceptional rapidity.