Impact of Demographic Changes on Inflation and the Macroeconomy

Author/Editor:

Jong-Won Yoon ; Jinill Kim ; Jungjin Lee

Publication Date:

November 24, 2014

Electronic Access:

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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 ongoing demographic changes will bring about a substantial shift in the size and the age composition of the population, which will have significant impact on the global economy. Despite potentially grave consequences, demographic changes usually do not take center stage in many macroeconomic policy discussions or debates. This paper illustrates how demographic variables move over time and analyzes how they influence macroeconomic variables such as economic growth, inflation, savings and investment, and fiscal balances, from an empirical perspective. Based on empirical findings—particularly regarding inflation—we discuss their implications on macroeconomic policies, including monetary policy. We also highlight the need to consider the interactions between population dynamics and macroeconomic variables in macroeconomic policy decisions.

Series:

Working Paper No. 14/210

Subject:

English

Publication Date:

November 24, 2014

ISBN/ISSN:

9781498396783/1018-5941

Stock No:

WPIEA2014210

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

31

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