• Debt Ratio
  • Debt to equity ratio
  • Debt to total capital ratio
  • Demographic Trap
  • Demographic Trap

    DEFINITION OF 'Demographic Trap'

    Demographic Trap is a situation in a country which is experiencing high fertility(birth rate) along with low mortality(death rate) which results in periods of high population growth rates.

    Explanation

    This kind of situation is more common in developing countries rather than in developed countries. It has already been established that high levels of development corresponds to lower fertility as well as lower mortality rates in a country, such a situation prevails in a developed country and thus it does not experience high levels of population growth normally. But in developing countries which are taking their path towards being developed country can experience demographic trap situation. In such countries due to developing better healthcare and medical facilities death rates fall rapidly, however birth rates do not fall rapidly making the country a place of high population growth rate.

    The booming population in such a scenario is called demographic trap because rising population presents a number of problems such as requirements of rapid development of economic and social infrastructure such as roads,bridges,schools,drinking water and stable food supply etc.The situation could be similar to Malthusian trap.

    However rapidly growing population can present the country with opportunities of higher economic growth by reaping its demographic dividend. For this the country needs to provide its masses with better education,health services, and other economic infrastructure so that this population can then work for the country and help in its rapid economic development and propel it towards higher income.

    Thus periods of high population growth is boon or bane is still debatable.

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  • Disinflation
  • Dividend payout ratio