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In the past population decline was mostly observed due to disease. The Black Death in Europe, the arrival of Old World diseases to the Americas, or the Irish Potato Famine, all caused massive population declines.
Today it is emigration and especially sub-replacement fertility rates that are causing population decline. Only a few nations today are experiencing population decline, the most notable ones being Russia and the Ukraine but if current trends continue much of the developed world will see declining populations in the next century.
The effects of a declining population are bad for an economy, but fewer humans have a smaller impact on the environment. Declining population does have many problems, but they are not nearly as disastrous as the potential of overpopulation.
Economically declining populations lead to deflationIn economics, deflation is a decrease in the general price level, or a rise in the purchasing power of money with respect to a large class of goods or services. Inflation is the opposite of deflation. Deflation should not be confused with disinflation whi, which has a number of harmful effects. Average standard of living, at least in terms of material possessions, will also end to rise as the ratio of land and resources per person will be higher. The period immediately after the Black Death, for instance, was one of great prosperity, as many had inheritances from many different family members. A declining population due to demographics also will be accompanied by population ageingIn demographics population ageing occurs when the average age of a region's population gets older. This is occurring in many nations around the world today and has a number of important consequences. Population ageing occurs when the fertility rate declin which has many problems for a society. The decade long economic malaise of JapanJapan (, Nippon/Nihon literally "the origin of the sun") is a country in East Asia situated on a chain of islands east of the Asian continent on the western edge of the Pacific Ocean. The largest of these islands are, from north to south, Hokkaido , Honsh is often linked to these demographic problems. The worst case scenario is underpopulationUnderpopulation is usually defined as when a country's population has declined too much to support its current economic system. A simple example would be if all the retired people were supported through a sort of social security system, and then a generat where the population falls to too low a level to support the current economic system.
A smaller national population can also have geo-strategic effects, but the correlation between population and power is a loose one.