. . .population dynamics could account for more than half of the miracle. A third or a half certainly isn’t everything, but it makes population dynamics the most important growth determinant by far.
—David E. Bloom and Jeffrey G. Williamson, Demographic Transitions and Economic Miracles in Emerging Asia
One hotly debated aspect of the relationship between population and the economy is reflected in the Malthusian perspective explored earlier in this book. For many years, economists and policy analysts fretted that rapid population growth in the less developed world was a major contributing factor to chronic poverty. Specifically, observers felt that a large and growing population retarded physical capital formation. They theorized that by reducing the birth rate, developing countries could divert the resources that would otherwise be consumed by a large population of dependent children and use them for investment. Indeed, that concern figured in China’s decision to adopt a one-child policy to limit population growth.
As China has enjoyed the highest compounded growth rate of any large economy in history, (growing by 9.8 percent annually since 1980, with the rate accelerating in the first decade of this century), the Malthusian move to limit birthrates may appear to have been vindicated. But look more closely. In the two centuries since the Reverend Thomas Malthus published his famous Essay on the Principle ...