Eight Billion

The world population has just reached an estimated eight billion people. The relationship between economic growth and population growth is a subject of economic discourse, going all the way back to dismal Malthus, through Thomas Piketty. It goes without saying that population growth is exponential, and it was barely more than a decade since the seven billion checkmark.

Growth is not evenly distributed, both economically, and demographically, and this can create all sorts of tensions. Low population growth in affluent countries, and high population growth in non-affluent countries each create their own set of problems of inequality, which of course change patterns of consumption, and with it demand for raw materials, which are increasingly fraught with supply issues and negative externalities like climate change. All businesses must concern themselves with these changes, no matter how indirectly positioned.

The relationship between monetary policy and population growth is also worth scrutiny, although from the endpoint of income distribution, there are many mitigating factors. What can be said generally is that the money supply must grow to accommodate an expanding population, but the past twenty years of monetary expansion has yielded no progress on economic inequality in the United States and mostly everywhere, and never without significant fiscal policy intervention.

We’ll be writing more on the subject of these historic shifts and landmarks, alongside issues of monetary policy and inflation, labor productivity, and cultural impact, here at Ithron | Insights.

References:

• https://journals.sagepub.com/doi/full/10.1177/2158244017736094

• https://ourworldindata.org/economic-growth#the-economy-before-economic-growth-the-malthusian-trap