Population as a Source of Long-Term Growth: From Malthus to Japan’s Postmodern Regime
This paper introduces a simple macroeconomic time series model incorporating a key concept of? GDP elasticity with respect to population (population elasticity). Using this model， we conducted empirical analyses of 158 countries each covering 25 to 180 years of history. As a result， we found first that the estimated population elasticity demarcated the countries according to regime， showing clearly whether a country was in the ‘Malthusian regime’， in the ‘modern growth regime’ or in the ‘postmodern regime’. We found that the poorest countries as well as some oil-rich countries were in the Malthusian regime. The modern growth regime prevailed in most European， Asian and American countries in the 20th century. We then predicted long-term real GDP for each country while they stayed in modern growth regimes. Third， we observed that both Germany and Japan went into a postmodern regime after a demographic transformation. Focusing on Japan， we argued that if the nation remained in the modern growth regime， it would face a precipitous decline in GDP. We suggested that Japan must reduce dependence on population as a source of growth in the postmodern era. This lesson might be important for the two thirds of countries in the world that are expected to enter a postmodern regime around the middle of this century.