History has demonstrated that the human race is built on abundance: abundance of resources, of ideas, of capital, and of people. Environmental degradation and climate change is in some regards the first reckoning with a fundamental change in abundance. Capital ebbs and flows over time but natural resources, by and large, have remained plentiful. This reversal is stirring great changes in society. But what if there was a change of equally seismic proportions, not of natural resource, but of human resource?

In this report we look back at how demographic change (particularly when combined with excess labour after the collapse of the USSR and the integration of China into the world economy) has proved to be a powerful deflationary force, with correspondingly powerful impacts on societies and economies. We examine the views of economists Charles Goodhart and Manoj Pradhan who, while pointing out the underestimation of demography as a root cause of the long term decline in inflation since the end of the last century, also discuss the potential for a reversal in these trends as ageing populations begin to weigh on the global economy. We explore this theory and the wider potential implications for Europe and for investors.