World Economic Outlook

The Global Demographic Transition

September 2004

A Survey by the Staff of the International Monetary Fund

©2004 International Monetary Fund
Ordering Information

The World Economic Outlook presents the IMF staff's analysis and projections of economic developments at the global level, in major country groups (classified by region, stage of development, etc.), and in many individual countries. It focuses on major economic policy issues as well as on the analysis of economic developments and prospects. It is usually prepared twice a year, as documentation for meetings of the International Monetary and Financial Committee, and forms the main instrument of the IMF's global surveillance activities.


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Contents
49 kb pdf file Assumptions and Conventions
Preface
Foreword

Chapter I.
493 kb pdf file

Economic Prospects and Policy Issues
United States and Canada: How Long Will the U.S. Soft Patch Persist?
Western Europe: A Solidifying, but Uneven, Recovery
Japan: Is Deflation Finally Coming to an End?
Emerging Asia: Prospects Are Bright but Can Macroeconomic Policies Rise to the Challenges?
  Latin America: Will the Economic Rebound Be Used to Build Resilience?
Emerging Europe: Will the Recovery Be Used to Address Fiscal Vulnerabilities?
Commonwealth of Independent States: Maintaining Stability During a Commodity Boom
  Africa: Can Improved Economic Performance Be Sustained?
Middle East: Fiscal Consolidation Challenges Ahead
Appendix 1.1 Commodity Markets
References
Chapter II.
412 kb pdf file  		Three Current Policy Issues
The Global House Price Boom
  Learning to Float: The Experience of Emerging Market Countries Since the Early 1990s
Has Fiscal Behavior Changed Under the European Economic and Monetary Union?
  Appendix 2.1 The Global House Boom: Sample Composition, Data Sources, Methods, and Results
  Appendix 2.2 Learning to Float: Methodology and Data
  Appendix 2.3 Monetary Policy Rules for the Euro Area
  Appendix 2.4 Estimating Fiscal Reaction Functions
  References
Chapter III.
282 kb pdf file 		 How Will Demographic Change Affect the Global Economy?
Changing Structure of the World's Population
  Economic Impact of Demographic Change
  Policies to Meet the Challenges of Global Demographic Change
  Appendix 3.1 Demographic Change and the Global Economy: Data and Modeling Strategy
  References
Annex: Summing Up by the Acting Chair
26 kb pdf file
Statitistical Appendix
294 kb pdf file
  Assumptions
  What's New
  Data and Conventions
  Classifications of Countries
  List of Tables
    Output (Tables 1-6)
    Inflation (Tables 7-11)
    Financial Policies (Tables 12-19)
    Foreign Trade (Tables 20-24)
    Current Account Transactions (Tables 25-31)
    Balance of Payments and External Financing (Tables 32-36)
    External Debt and Debt Service (Tables 37-42)
    Flow of Funds (Table 43)
    Medium-Term Baseline Scenario (Tables 44-45)
World Economic Outlook and Staff Studies for the World Economic Outlook, Selected Topics
 50 kb pdf file
  Boxes
1.1 Is Global Inflation Coming Back?
1.2 What are the Risks of Slower Growth in China?
  1.3 Is the Doha Round Back on Track?
1.4 Regional Trade Agreements and Integration:
The Experience with NAFTA
  1.5 Bringing Small Entrepreneurs into the Formal Economy
1.6 Governance Challenges and Progress in Sub-Saharan Africa

2.1 What Explains the Recent Run-Up in House Prices?
2.2 Adjustable- or Fixed-Rate Mortgages: What Influences Country's Choices?
  2.3 How Did Chile, India, and Brazil Learn to Float?
2.4 Foreign Exchange Market Development and Intervention
2.5 Trade and Financial Integration in Europe: Five Years After the Euro's Introduction
3.1 Demographic Projections: Methodologies and Uncertainties
3.2 How Will Population Aging Affect Financial Markets?
  3.3 HIV/AIDS: Demographic, Economic, and Fiscal Consequences
  3.4 Implications of Demographic Change for Health Care Systems
  3.5 Impact of Aging on Public Pension Plans
  A1 Economic Policy Assumptions Underlying the Projections for Selected Advanced Economies
  Tables
  1.1 Overview of the World Economic Outlook Projections
  1.2 Advanced Economies: Real GDP, Consumer Prices, and Unemployment
  1.3 Emerging Market and Developing Countries: Net Capital Flows
  1.4 Major Advanced Economies: General Government Fiscal Balances and Debt
  1.5 Selected Economies: Current Account Positions
  1.6 Selected Asian Economies: Real GDP, Consumer Prices, and Current Account Balance
  1.7 Selected Western Hemisphere Countries: Real GDP, Consumer Prices, and Current Account Balance
  1.8 Emerging Europe: Real GDP, Consumer Prices, and Current Account Balance
  1.9 Commonwealth of Independent States: Real GDP, Consumer Prices, and Current Account Balance
  1.10 Selected African Countries: Real GDP, Consumer Prices, and Current Account Balance
  1.11 Selected Middle Eastern Countries: Real GDP, Consumer Prices, and Current Account Balance
  1.12 Commodity Consumption in Selected Countries
  1.13 Nonenergy Commodity Prices
  1.14 Impact in a Permanent US$5 a Barrel Increase in Crude Oil Prices After One Year
  1.15 Impact of Nominal Oil Price Hikes
  1.16 Movements in the IMF Commodity Price Index
  1.17 Trade Gains and Losses from Commodity Price Movements: Emerging Market and Developing Countries
  2.1 Housing Indicators in Some Industrial Countries
  2.2 Emerging Market Countries' Transitions to More Flexible Regimes, 1992-2002
  2.3 Euro Area: Real Short-Term Interest Rates and Competitiveness
  2.4 Discretionary Fiscal Policies: Stabilizing or Destabilizing?
  2.5 Variance Decomposition for Selected Countries
  2.6 Monetary Gaps: Descriptive Statistics
  2.7 Country-Specific Estimates of Fiscal Reaction Functions
  2.8 Fiscal Authorities' Behavior in the Euro Area: Panel Analysis, 1982-2003
  2.9 Fiscal Authorities' Behavior in the Euro Area: Panel Analysis, 1982-2003
  2.10 Fiscal Authorities' Behavior in the Euro Area: Panel Analysis, 1982-2003
  3.1 Macroeconomic Impact of Demographic Changes: Panel Instrumental Variable Regressions
  3.2 Selected Summary Statistics, 1960-2000
  3.3 Main Characteristics of the Multiple-Generations Models
  3.4 INGENUE Model: Countries Composing Each Demographic Zone
  Figures
  1.1 Global Indicators
  1.2 Current and Forward-Looking Indicators
  1.3 Trade Gains and Losses from Commodity Price Movements Betweeen 2003 and 2004
  1.4 Developments in Mature Financial Markets
  1.5 Emerging Market Financial Conditions
  1.6 Global Exchange Rate Developments
  1.7 Global Outlook
  1.8 Fiscal and Monetary Easing in the Major Advanced Countries
  1.9 Fiscal Vulnerability Indicators
  1.10 United States: House Prices
  1.11 United States: Interest Rates
  1.12 European Union: Fiscal Challenges
  1.13 Japan: The End of Deflation?
  1.14 Emerging Asia: Current Account Surpluses Remain Strong
  1.15 Latin America: Trade Share Rising, But Scope for Further Reduction in Restrictiveness
  1.16 How Close Are the New EU Members to the Convergence Criteria for EMU Membership?
  1.17 CIS: Riding on the Crest of a Global Commodity Boom
  1.18 Sub-Saharan Africa: Net Impact of Commodity Price Changes on Trade Balances
  1.19 Middle East: Resisting Pressure to Spend Higher Oil Revenue
  1.20 Oil Prices, Futures, and Production
  1.21 OPEC Spare Capacity, Commercial Inventories, and Speculative Activity
  1.22 Global Production Capacity and Real Average Petroleum Spot Price
  1.23 Nonenergy Commodities
  1.24 Semiconductor Market
  2.1 Average Growth and Volatility of House Prices in Industrial Countries
  2.2 Growth and Volatility of House Prices in Industrial Countries
  2.3 Co-movement Between Macroeconomic Aggregates and House Prices
  2.4 Is There International Synchronization?
  2.5 Variance Decomposition of House Prices
  2.6 What Explains House Price Fluctuations?
  2.7 How Would House Prices React to an Increase in Interest Rates?
  2.8 Increasing Exchange Rate Flexibility in Emerging Markets
  2.9 Macroeconomic Indicators
  2.10 Real Effective Exchange Rate Overvaluation
  2.11 Volatility of Exchange Rate
  2.12 Indicators of External Debt
  2.13 Central Bank Independence in Emerging Markets
  2.14 Exchange Rate Regimes of Emerging Markets and Inflation Targeting, 2003
  2.15 Indicators of Financial Sector Supervision and Development
  2.16 Financial Policy Frameworks, 2002
  2.17 Indicators of Financial Sector Liberalization
  2.18 Cross-Country Dispersion of Selected Economic Indicators
 
 		 2.19 Real Interest Rates and Competitiveness
  2.20 Monetary Policy Rules for Selected Euro Area Economies
  2.21 Fiscal Behavior in the Euro Area
  2.22 Procyclicality and Output Volatility
  2.23 Fiscal Stance in the Euro Area, 1982-2003
  2.24 Procyclicality and Deficit Bias, 1975-2003
  2.25 Procyclicality in Good and Bad Times
  2.26 Interest Payments: Where Did the Savings Go?
  2.27 Countries at Odds with the Stability and Growth Pact
  3.1 Global Demographic Transition, 1700-2050
  3.2 Key Demographic Trends, 1950-2050
  3.3 Where the World's Population Lives
  3.4 Population Structures, 1950-2050
  3.5 Uncertainty in Population Projections
  3.6 Per Capita Growth and Working-Age Population
  3.7 Impact of Demographic Change in Growth and Current Account Balances, 2000-50
  3.8 Implications of Projected Demographic Change in the INGENUE Model
  3.9 Some Policy Responses to a Declining Labor Force in Advanced Economies
  3.10 Life Expectancy and Age of Retirement for Males in Selected Advanced Economies
  3.11 Impact of Pension Reforms in Europe in the INGENUE Model
  3.12 The Last Train for Pension Reform Departs in...
  3.13 Implications of Labor and Capital Mobility for Per Capita Consumption, 2000-60
  3.14 Implications of a 1 Percentage Point Decline in Developing Country Risk Premium in the MSG3