https://macropaperwarehouse.com/authors/juan-m.-sanchez/Juan M. SánchezHugo -- gohugo.ioen-usThu, 01 Jan 2026 00:00:00 +0000https://macropaperwarehouse.com/papers/from-population-growth-to-tfp-growth/Thu, 01 Jan 2026 00:00:00 +0000https://macropaperwarehouse.com/papers/from-population-growth-to-tfp-growth/<p>This paper asks how the well-documented slowdown in labor-force growth affects aggregate total factor productivity (TFP) growth, a question that prior work on business dynamism had left unanswered. The authors build a general-equilibrium business-dynamics model that embeds two engines of productivity growth: innovation by young entrants (a step-size improvement over the leading-productivity frontier, in the spirit of Romer 1990 and Aghion-Howitt 1992) and steady productivity growth by mature leading businesses. Population (labor-force) growth determines the demographic composition of the business stock, because the number of firms must grow in proportion to the labor force along any balanced growth path (BGP). A slower labor force therefore shifts the firm distribution toward older incumbents.</p>