A Working Model?

We have talked a lot recently here at Alpha.Sources about the fertility trap  (and here) hypothesis and, as it were, also generally about Edward and I's thoughts on how demographics affect the macroeconomic environment in general. One of the most active participants in the discussion has been Ape Man who is blogging excellently from over at his own blog. Apparently, all this has gotten Ape Man to think and quite a lot too. Consequently, his recent post fields a very impressive response to Edward and I's thoughts and hypotheses as they have been slowly developing over the last year. I will of course respond in much more detail later but I still recommend you to stop by Ape Man's blog and have a look at the very interesting essay ... here is an excerpt from the entry;

As part of their work on the Fertility Trap Hypothesis, Edward Hugh and Claus Vistesen argue that an aging demographic profile will lead to an export-oriented economy. More controversially (at least to me), they argue that a move towards an export economy will make it hard to raise birth rates to replacement levels. They think that the process of moving towards an export-based economy will put pressure on wages of young people which in turn will make them less likely to have children.


Now there are many ideas in the Fertility Trap Hypothesis that I think are quite strong and likely to hold up across all cultures. But I don’t think the Huge and Vistesen’s work with the Life Cycle Model will be one of the successful ideas. I see no reason to think that fertility will be negatively affected even if savings/consumption behaves as the Life Cycle model says that they will. In other words, even if the Life Cycle Model holds true across all cultures (a big if, that), the economic effects that will result are not part of the “Fertility Trap.'

Well worth a look!