Economic Commentary: Demographics, Housing, Olympics


  • The Pandemic Has Done Damage to Demographics
  • U.S. Housing Boom
  • Japan: Recovery and Olympics On The Line

A friend of mine was trying to find a silver lining amid the dark clouds that accumulated during the early days of the pandemic. Her son and his wife, both of whom had busy jobs, had been forced off the road and out of the office. The additional time together at home, she hoped, would result in a grandchild.

I was hoping she would be granted her wish, although for less sentimental reasons. Population growth in developed countries has slowed to a crawl over the past several years, and actually declined in China last year. A few more babies would help keep the labor force from shrinking in the decades ahead. But not even last year’s home confinement prompted more procreation.

Last year’s baby bust is just one aspect of the damage done to the world’s demographics during the last year. The pandemic has taken a significant toll on populations, costing lives and increasing disabilities. The scale and ability of the labor force are important foundations for long-term economic growth; both have been diminished by COVID-19. Once the current frenzy of economic reopening subsides, countries may face a more challenging long-term outlook.

Weekly Economic Commentary - Chart 1

Prior to the pandemic, we contended demographics were being overlooked as an economic issue. In our 2019 essay "Age Isn’t Just a Number," we highlighted the significant impact advancing seniority will have on growth, inflation and market performance. Fewer workers mean less output, more stress on retirement systems, and more risks to debt sustainability.