Fertility fall is further cause of stagnation

I continue to believe that long-term economic growth is hamstrung by the heavy regulatory morass that people find themselves in from day to day. The rules and regulations are extensive, and limit the innovative possibilities. This means long-run growth opportunities are limited, with interest rates over the 21st century likely to fall significantly – unless, of course, there is a significant change in our world.

This excellent article by Robin Hanson argues that falling fertility at the civilisation-level is going to cause a contraction in population, which therefore causes a contraction in the economy and contration in human creativity:

The rate at which we find new innovations is roughly proportional to the size of the world economy. Our economy thus grows exponentially, and has done so for a very long time. (Since 1980, it has doubled on average every 24 years. Since 1961 that is 20 years.) However, this innovation rate is limited by population, and due to falling fertility, population is going to peak soon, plausibly in about thirty years or so, and then decline, And during a falling economy the innovation rate should fall proportionally, and thus “grind to a halt”, not restarting again until well after fertility rises again, plausibly many centuries later. 

How Much More Innovation Before Pause?

Worth reading: the disruption to Asia and continental Europe is likely to show the way for the rest of the world. This makes it all the more important that we fix the regulatory burden that our community faces: the clock is ticking, with limited time to fix this for humanity.