I. Demographic Changes, Economic Growth, and Interest Rates First, let us consider the impact of a declining and aging population on economic growth. If the population is declining and aging at the same time, the working-age population decreases. Since a reduction in the working-age population means a decrease in labor input, this leads to a slowdown in economic growth.
In rectifying the problem there has to be some level of equity in sharing the pain, but the basic fundamental problem still remains and has to be treated with. To give a basic example, suppose an individual earned $ a month and was able to spend through credit $ a month.