England's "The Macroeconomic Impact of Global Aging" (CSIS, $18.95) results from the Center for Strategic and International Studies' Global Aging Initiative, of which England is research director.

His central thesis is that the aging of populations in most major developed countries in the 2000-2050 period will produce a much slower rate of economic growth, from two factors: the fiscal strain of funding excessive pension payments and the savings deficit produced by a society dominated by old people running down their savings.

England examines three major studies over the past decade that have looked at this problem. They are from the International Monetary Fund, the Organization for Economic Cooperation and Development, and the European Union.

All have concurred that in some countries, notably Japan and in the major continental European countries, the demographic transition to an aging population is severe, beginning soon in the case of Japan and around 2010 in the case of the EU.

England also examines the effect of aging, in particular a higher dependency ratio (of retired people to the workforce) on saving. A number of studies have been carried out, which have shown an increase of 1 percent in the dependency ratio producing decreases of 0.3 percent to 1.6 percent in the savings rate. He inclines towards the upper limit of these estimates.

England then draws conclusions as to growth rates that I don't think are entirely justified.

In the EU study, for example, EU growth rates in 2025-2050 are projected to be lower than now on an absolute level, and lower than in some unexamined "base case." But since the population of the EU is declining during this period, growth rates per capita are higher than in the non-demographically challenged United States.

It isn't at all clear that innovation per se will be significantly affected by the smaller young populations. After all, William Shakespeare and Isaac Newtonboth emerged in a country of less than 3 million people.

However, in countries with aging, declining populations, while per capita wealth may increase, there are likely to be some bizarre re-distributive effects, including steadily falling house prices and excess infrastructure capacity. Also, such countries will rapidly lose importance in the world economy and political system, which itself could be disruptive.

The second conclusion that he draws, and which I don't think is justified, is that we can ignore emerging markets because they, too, are in demographic transition.

There are two countervailing factors here.

First, while indeed some emerging markets are in demographic transition, they are now and for the next several decades in the favorable portion of the transition, while the school age dependency ratio is declining in favor of the working population.

Second, while it might be true that the savings rate in emerging Asia will fall as the population ages, it is so much higher than in Europe or the United States, and the rate of economic growth is and is expected to be so much faster, that the overall world savings rate might well increase and not decline, as emerging Asia becomes relatively more important.

The salience of England's analysis is thrown in doubt by a further factor: in certain respects, it conflicts with economic observation.

In the United States, for example, the savings rate according to his model should have increased in the 1990s, as the baby boomers moved into their maximum saving years.

As we know, it declined, to levels that might prove to have been catastrophically low.

This does not disprove England's thesis, of course. It merely suggests that there might be other factors operating (such as in the 1990s an out-of-control stock market bubble) that cause trends to move contrary to demographic expectations.

Nevertheless, there are certain conclusions England draws that appear valid.

The social security systems of Japan, most of the EU, and to a lesser extent the United States, are a serious problem. They will cause huge increases in government debt levels unless steps are taken as soon as possible to modify them.

By far the least painful modifications, economically speaking, are a rise in the retirement age and an increase in the rate of participation in the labor force, both of which decrease the dependents and increase the working population. This is, however, directly contrary to observed recent trends in the EU, and indeed to much recent EU policy.

The low level of savings, which is already a problem in the United States (albeit disguised by a huge trade deficit and corresponding inflows of foreign capital), is likely to become a more serious problem in both the United States and the EU going forward. That is less so in Japan, in spite of its demographic problem, because of its high savings rates.

This will to an extent be balanced by much higher savings flows in emerging markets, particularly if large countries such as China and India free their foreign exchanges (as India is already largely doing).

We will then, however, see a bizarre reversal of the 19th century colonial development flow, in which savings will flow from the relatively impoverished emerging markets to the still relatively rich EU and United States.

England sees a world in which a relatively bright economic picture in 2000-2010 gradually darkens, so that growth in 2025-2050 is sluggish indeed.

My own view, for different reasons, would be the reverse of his -- I expect things to improve after 2015, as the effects of the current asset price deflation wear off.

The global aging problem is indeed significant and could cause trouble if badly managed -- as in certain respects, it probably will be. But there is no reason to assume that the Asian-centric world of 2050 will not be very much richer than today's.