Economics can be counter intuitive. For instance, saving is desirable and necessary to fund the investment on which future prosperity depends. But Keynes explained why too much saving in the short-run can make society poorer. This is the "paradox of thrift".

Over a century earlier, Ricardo had described how two countries can mutually benefit from trade even if one country is more efficient at producing every tradable good. This is "comparative advantage", an ostensibly simple concept that seems to be beyond the grasp of many people. Politicians are especially prone to misunderstanding that national advantages tend to be relative, not absolute.

A recent paper published by Nobel laureate Daron Acemoglu and MIT colleagues fits neatly into the tradition of counter-intuitive economics.  It found that “lower birth rates are associated with higher growth in GDP per working-age adult across countries and higher wage growth across US commuting zones, with no negative impact on aggregate GDP or earnings.”

This seems a bit odd. Economists have long believed that slowing population growth is likely to depress economic growth. In ageing societies with growing numbers of retirees, we can assume a lower share of the population will be in work.

Scotland population - the data on how the nation is changing

The rate of human capital accumulation – a major driver of growth over the last century as more people (especially women) entered the labour market and many more young people completed secondary and tertiary education – is likely to slow. The demand for labour intensive personal services such as health and care will increase, tending to lower the aggregate rate of productivity growth.

But Acemoglu et al find........

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