you can’t print babies, but you ought to divide by them

Tyler’s macro experts, Hugh and ScottĀ don’t seem to understand what economic growth is for, or how to measure it.

People, a country with a zero percent change in its overall GDP combined with a shrinking population is actually generating higher living standards for its citizens.

In other words, for most economic purposes, it’s per-capita growth that we should be measuring.

Sure, the raw size of the economy might be a problem for debt ratios and total war, but I’d rather live in an economy with zero change in GDP and a population growth rate of -1% than an economy with a1% growth rate in GDP and a population growth rate of 2%.

Living standards are rising in the first case and falling in the second case.

This is why the worry about, “the Chinese economy may be bigger than the US economy” makes no sense from an economics standpoint. China is still a relatively poor country inĀ terms of income per capita or median income.

Sure, Japan could do a lot of things better. It could be more open to women in the workforce (I think this may be starting to happen). It could be more open to trade and investment.

But it is very very far from being an economic disaster.