There is a very close relationship between the growth of the population and the growth of the economy. If the population is large, then chances of innovation and research are also very high. If the population declines, then the growth of the economy will also be stagnant.

Mainstream macroeconomic models work on the rational choice theory that assumes that an individual is selfish and always works for his own best interest. It does not take into consideration the external factors that affect the growth and development of the economy. For example, it considers the individual rational and does not take into account the contribution made by that individual in R/D activity.

Thus, it can be said that the mainstream economics model ignores some significant effects of the population.