This is a concept that I just learned the other day. I think it's incredibly accurate too. I recently watched Demographic Winter. It was an eye-opening show. The purpose of the film, I think, is to show how demographics affect the economy. It also shows several reasons why the fertility rate has dropped by so much in the majority of countries.
My main focus though is the relationship between a countries population and a prosperous economy. If you recall, the United States had a baby boom from 1946 - 1964. This greatly increased the population. Another fact is that most people spend the most money between the ages of 45 and 50. This is mainly due to the expenditures that they have to pay out for their children. These expenses include family expenses, college, and every other expense incurred by supporting a family, such as clothing, food, etc. During this time of increased spending, the economy booms. In the case of the baby boomers, they spent and will spend most of their money between 1994 and 2012. While they were spending all of this money, the economy was booming. The United States was prosperous. This is only because spending drives economic prosperity.
Here's a clip from the movie I found on Youtube containing those statements.
With the fertility rate declining, the population is decreasing. As the population declines, so does the amount of spending. Adam Smith even said that a country needs a growing population in order to maintain a prosperous economy. I think the only reason that the United States will stay fairly prosperous is because of the illegal immigrants from Mexico. They keep plenty of people in the country.
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