Macroeconomic Effects of Prelected Population Aging in Industrial Countries

Author/Editor:

Paul R Masson ; Ralph W. Tryon

Publication Date:

January 1, 1990

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

The effects of population aging are examined with the aid of a theoretical model and simulations of MULTIMOD. An older population will consume more of aggregate disposable income, require higher government expenditure, and decrease labor supply. These effects should raise real interest rates and lower the capital stock and output. Effects on current balances will depend on the relative speed and extent of aging. Simulations of projected demographic changes suggest that by 2025, real interest rates would be increased by several percentage points and net foreign assets increased in the United States, and decreased in Japan and Germany, as a result.

Series:

Working Paper No. 1990/005

Subject:

Aging Expenditure Financial services Foreign exchange National accounts Population and demographics Private savings Real effective exchange rates Real interest rates

Notes:

Also published in Staff Papers, Vol. 37, No. 3, September 1990.

English

Publication Date:

January 1, 1990

ISBN/ISSN:

9781451929553/1018-5941

Stock No:

WPIEA0051990

Pages:

32

Please address any questions about this title to publications@imf.org