Less population growth but not really worse off!


The latest report on the possible outcomes of Brexit from the GLA suggests that total output will be lower under a variety of scenarios than would have been the case without Brexit. A number of factors would operate to reduce output including trade, investment and size of the labour force. What is interesting however, is that if the population were to fall, output per person and demand for services would also fall such that the fall in GDP per head would be marginal. Which illustrates the argument that population increase is not beneficial to the existing population. Economic growth derived from population growth creates the illusion of greater prosperity!

[Of course we need to cut growth before we destroy the planet!]

There could be the Japan-ification of the UK economy. The report expects all parts of the UK economy to shrink over the next 12 years from trade and investment to employment and government revenues. But with the population also expected to fall significantly from current official projections, the number of people in the country needing jobs and government services will be lower, allowing for only marginal falls in GDP per head.

In Japan, GDP has remained largely static for two decades and yet the population has remained largely satisfied. This follows a decline in the population that means GDP per head increases.

https://www.theguardian.com/business/2018/jan/11/does-london-mayor-sadiq-khans-brexit-report-stack-up

Greater London Authority, Preparing for Brexit, 2018.

Advertisements

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 )

Google+ photo

You are commenting using your Google+ 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 )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.