The main problem is that demographic changes normally have the same directional effect both on ex ante savings and on ex ante investment. Slower population growth will lower savings (assuming a constant dependency ratio), but will equally lessen the need for more capital, houses, equipment, etc. However, this doesn’t tell us whether the capital/labour ratio will fall or rise, thereby raising or lowering the marginal productivity of capital. With both ex ante S and ex ante I moving in the same direction, assessing the likely balance between the two becomes problematic.
