## INTRODUCTION

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### Context and research question
- Population aging is driven by steady declines in fertility rates and increasing longevity and poses macroeconomic challenges and opportunities across fiscal, monetary, financial, labor market and other structural policies.
- G20 leaders (June 2019) and the Framework Working Group on Macroeconomic Implications of Population Aging (2019) emphasize forward-looking, proactive policy responses.
- Critical question: how does population aging modify the effectiveness of macroeconomic policies—specifically, the output effects of fiscal spending shocks?

### Contribution and approach
- First empirical paper to assess the impact of population aging on fiscal policy effectiveness using panel data at the national (OECD) level.
- Sample: unbalanced panel of 17 OECD countries over the period of 1985–2017.
- Aging measure: old-age dependency ratio (people 65+ to those 15–64). Baseline threshold: economy is “aging” if old-age dependency ratio exceeds the sample median of 22.7 percent.
- Identification of government spending shocks: forecast errors of government spending (Auerbach and Gorodnichenko methodology).
- Estimation method: local projection method (LPM) of Jordà (2005), estimating separate regressions for horizons h = 0, 1, 2, 3, 4 (medium-term 5-year horizon), with impulse responses computed from estimated β coefficients.

### Empirical specification (benchmark)
- Dependent variable: change in log real GDP from t−1 to t+h.
- Key regressor: Shock = Git − Git^E, where G is government spending as a share of GDP and Git^E is prior forecast (from the fall OECD Economic Outlook).
- State dummy Iit = 1 for aging economies (old-age dependency ratio > 22.7 percent), 0 otherwise.
- Controls: vector Xit, country fixed effects αi, time fixed effects γt, horizon-specific residual εi,t^h.
- Horizons considered: h = 0 (year of shock) through h = 4 (four years after shock).

### Identification advantages
- Forecast-error identification addresses:
  - fiscal foresight, and
  - potential feedback from the state of the economy to fiscal policy.

### Channels explored
- Possible mechanisms for weaker output effects in aging economies:
  - Ricardian-type responses.
  - Lower growth in labor supply (fewer workers; higher share of older workers; age-specific productivity profiles).

### Key empirical findings
- Linear (pooled) result (ignoring aging state):
  - A positive government spending shock of 1 percent of GDP increases output by about 0.1 percent in the first year and 0.5 percent in the fourth year after the shock.
- Heterogeneous effects by aging status:
  - Non-aging economies: positive government spending shock of 1 percent of GDP increases output by about 0.09 percent in the same year and 0.6 percent four years after the shock.
  - Aging economies: output effects are not statistically significant over the 5-year horizon.
- Statistical significance of differences:
  - Differences between aging and non-aging economies are statistically significant at the 5 percent level from t = 1 and at 10 percent at t = 0.
- State-dependent (boom vs. recession) results:
  - During recessions:
    - Population aging weakens the positive output effects of government spending shocks; differences between aging and non-aging economies are statistically significant in the medium term (from t = 2).
  - During booms:
    - In aging economies, positive government spending shocks reduce output and the negative effect is long-lasting; differences in boom responses between aging and non-aging economies are not statistically significant.
- Magnitude examples (shock size and responses):
  - Shock size used throughout: 1 percent of GDP.
  - Linear pooled: +0.1 percent at t=0; +0.5 percent at t=4.
  - Non-aging: +0.09 percent at t=0; +0.6 percent at t=4.
  - Aging: statistically insignificant responses over 5 years.

### Stylized facts motivating the study
- Old-age dependency ratios have been rising for several decades and are projected to increase further; high-income countries lead the trend; middle-income countries follow with a lag.
- Projection highlight: within the next 30 years, more than 20 countries would exceed an old-age dependency ratio of 50 percent, with some reaching 70 percent (UN medium variant projections beyond 2020).
- Associated macroeconomic patterns:
  - Growth: fitted line example y = -13.9x + 5.6; R² = 0.52; correlation = -0.71 for average growth 2009–2018 vs. old-age dependency ratio.
  - Labor: labor force growth fitted line y = -9.6x + 3.1, R² = 0.3806, correlation = -0.62; total labor force participation fitted line y = 35.4x + 65.2, R² = 0.1681, correlation = 0.41.
  - Public debt: fitted quadratic y = 2401.6x^2 − 896.4x + 121.73; R² = 0.5477; correlation = 0.60 between old-age dependency ratio and general government debt (% of GDP).

### Policy implications and recommendations
- Fiscal policy design in aging economies:
  - Account for weaker demand-supporting effects of fiscal policy as population aging proceeds.
  - During recessions, larger fiscal stimulus would be called for to support aggregate demand, implying the need to maintain a larger fiscal space to allow for wider swings in the fiscal position.
  - Given weak fiscal-stimulus effects even in recessions, other macroeconomic policies or structural reforms must play a more important role.
  - Policy measures to promote labor supply could help increase the output effect of fiscal stimulus in aging economies (e.g., higher retirement age, increased female labor force participation, immigration policies).
- Broader implication: rethinking macroeconomic policy design in aging economies should include fiscal, macroprudential, and structural labor-market measures given weakened fiscal multipliers.

### Box 1 — Would Fiscal Stimulus be Effective During Recessions in Highly Aging Economies?
- Main finding on state-dependence and degree of aging:
  - In aging economies (old-age dependency ratio above 22.7 percent), the output effects of fiscal spending shocks are state-dependent.
  - Varying the old-age dependency threshold (22 percent, 24 percent, 26 percent):
    - Thresholds at 22 percent and 24 percent: estimated output effects during recessions remain almost the same as the benchmark.
    - Threshold at 26 percent: output effects become statistically insignificant a year after the spending shock.
  - Conclusion: The demand-supporting effects of fiscal stimulus in a recession decline as population aging progresses.

- Channels examined in Box 1:
  - Labor supply:
    - Sample split by labor force growth median of 0.8 percent.
    - 61 percent of observations in aging economies are associated with below-median labor force growth.
    - 61 percent of observations in non-aging economies come with above-median labor force growth.
    - Fiscal spending shocks have a positive impact on output with higher labor force growth, and no statistically significant impact with lower labor force growth.
    - Differences between groups are statistically significant at the 1 percent level.
    - Policy implication: increasing labor supply could mitigate the adverse impact of population aging on fiscal policy effectiveness.
  - Public debt:
    - Sample median of public debt is 57.2 percent of GDP.
    - 54 percent of observations in aging economies are associated with above-median public debt.
    - 53 percent of observations in non-aging economies are associated with below-median public debt.
    - In lower-debt countries, government spending shocks have robust positive and statistically significant output impacts; in higher-debt countries, effects are not statistically significant.
    - Differences between non-aging lower-debt economies and aging higher-debt economies are statistically significant at the 5 percent level at t=0 and 1 percent level from t=1.
    - Interpretation: Population aging may amplify Ricardian effects; high-debt aging economies face even weaker fiscal multipliers than high-debt non-aging economies.
  - Private consumption and investment:
    - Aging economies: effects on private consumption and private investment are not statistically significant.
    - Non-aging economies: effects on private consumption and private investment are positive and statistically significant.
    - Interpretation: Weaker transmission to private consumption and investment in aging economies likely reflects Ricardian-type responses and lower labor supply growth.

- Robustness checks summarized:
  - Alternative aging measures (share of youth aged 20–29; share of working-age population) leave main results broadly unchanged.
  - Smooth transition function instead of dummy does not change main results.
  - Alternative government spending shock measures (forecasts from October previous year; April same year) leave results broadly unchanged.
  - Adding current and lagged output growth innovations as controls does not change main results.
  - No statistically significant difference between positive and negative shocks when controlling with a dummy for shock sign.
  - Decomposition into consumption and investment spending shocks:
    - Both consumption and investment shocks have positive output effects in both aging and non-aging economies.
    - Output effects of consumption shocks are larger in non-aging economies.
    - Investment shocks have larger output effects than consumption shocks in both economies.
  - Business cycle measures (growth rate, unemployment rate, output gap) and inclusion of controls (lag of growth rate, lag of shocks, level of public debt, interest rates, revenue shocks) leave main results broadly unchanged.

- Box 1 policy implications:
  - During recessions, a larger fiscal stimulus would be required to support aggregate demand; stimulus packages should allow discretionary and temporary spending increases in areas with larger multipliers (e.g., capital spending).
  - A larger fiscal space may be required to allow wider swings of the fiscal position; countries should secure sufficient fiscal space during booms and build significant fiscal space before aging progresses too far.
  - Policy measures to promote labor supply (stronger female labor force participation; labor-market-need-based immigration) could help increase the output effect of fiscal stimulus.
  - Other macroeconomic policies and structural reforms need to play a more important role in supporting domestic demand, since both monetary policy and fiscal policy effects would likely be weakened in aging economies.

*Source: INTRODUCTION (wpiea2020092-print-pdf).*

### INTRODUCTION _________________________________________________________________________________ 4

### INTRODUCTION _________________________________________________________________________________ 4

### Major Sections
- I. LITERATURE REVIEW __________________________________________________________________________ 5
- II. STYLIZED FACTS ____________________________________________________________________________ 6
- III. DATA AND EMPIRICAL METHODOLOGY  ___________________________________________________ 9
- IV. EMPIRICAL FINDINGS  _____________________________________________________________________ 10
  - A. Basic Results __________________________________________________________________________________ 10
  - B. Recessions vs. Booms _________________________________________________________________________ 11
  - C. Possible Channels of Transmission ____________________________________________________________ 14
  - D. Robustness Checks ____________________________________________________________________________ 18
- V. CONCLUSION AND POLICY IMPLICATIONS _______________________________________________ 19

### Boxes
- 1. Would Fiscal Stimulus be Effective During Recessions in Highly Aging Economies? ___________ 13

### Figures (listed)
- 1. Old-Age Dependency Ratio ____________________________________________________________________ 7
- 2. Projected Demographic Changes _______________________________________________________________ 7
- 3. Growth Performance ___________________________________________________________________________ 7
- 4. Labor Force Growth and Aging Population _____________________________________________________ 8
- 5. Labor Force Participation and Aging Population  _______________________________________________ 8
- 6. Public Debt and Population Aging _____________________________________________________________ 8
- 7. Output Effects of the Government Spending Shock ___________________________________________ 11
- 8. State-Dependent Fiscal Multipliers in Both Aging and Non-Aging Economies ________________ 12
- 9. Labor Supply and Population Aging ___________________________________________________________ 15
- 10. The Role of Public Debt Level ________________________________________________________________ 17
- 11. Government Spending Shocks on Private Consumption and Investment_____________________ 18

*Source: wpiea2020092-print-pdf - INTRODUCTION _________________________________________________________________________________ 4*

### INTRODUCTION

### INTRODUCTION

### Context and research question
- Population aging is driven by steady declines in fertility rates and increasing longevity and poses macroeconomic challenges and opportunities across fiscal, monetary, financial, labor market and other structural policies.
- G20 leaders (June 2019) and the Framework Working Group on Macroeconomic Implications of Population Aging (2019) emphasize forward-looking, proactive policy responses.
- Critical question: how does population aging modify the effectiveness of macroeconomic policies—specifically, the output effects of fiscal spending shocks?

### Contribution and approach
- First empirical paper to assess the impact of population aging on fiscal policy effectiveness using panel data at the national (OECD) level.
- Sample: unbalanced panel of 17 OECD countries over the period of 1985–2017.
- Aging measure: old-age dependency ratio (people 65+ to those 15–64). Baseline threshold: economy is “aging” if old-age dependency ratio exceeds the sample median of 22.7 percent.
- Identification of government spending shocks: forecast errors of government spending (Auerbach and Gorodnichenko methodology).
- Estimation method: local projection method (LPM) of Jordà (2005), estimating separate regressions for horizons h = 0, 1, 2, 3, 4 (medium-term 5-year horizon), with impulse responses computed from estimated β coefficients.

### Empirical specification (benchmark)
- Dependent variable: change in log real GDP from t−1 to t+h.
- Key regressor: Shock = Git − Git^E, where G is government spending as a share of GDP and Git^E is prior forecast (from the fall OECD Economic Outlook).
- State dummy Iit = 1 for aging economies (old-age dependency ratio > 22.7 percent), 0 otherwise.
- Controls: vector Xit, country fixed effects αi, time fixed effects γt, horizon-specific residual εi,t^h.
- Horizons considered: h = 0 (year of shock) through h = 4 (four years after shock).

### Identification advantages
- Forecast-error identification addresses (i) fiscal foresight and (ii) potential feedback from the state of the economy to fiscal policy.

### Channels explored
- Possible mechanisms for weaker output effects in aging economies:
  - Ricardian-type responses.
  - Lower growth in labor supply (fewer workers; higher share of older workers; age-specific productivity profiles).

---

### Key empirical findings
- Linear (pooled) result (ignoring aging state):
  - A positive government spending shock of 1 percent of GDP increases output by about 0.1 percent in the first year and 0.5 percent in the fourth year after the shock.
- Heterogeneous effects by aging status:
  - Non-aging economies: positive government spending shock of 1 percent of GDP increases output by about 0.09 percent in the same year and 0.6 percent four years after the shock.
  - Aging economies: output effects are not statistically significant over the 5-year horizon.
- Statistical significance of differences:
  - Differences between aging and non-aging economies are statistically significant at the 5 percent level from t = 1 and at 10 percent at t = 0.
- State-dependent (boom vs. recession) results:
  - During recessions:
    - Population aging weakens the positive output effects of government spending shocks; differences between aging and non-aging economies are statistically significant in the medium term (from t = 2).
  - During booms:
    - In aging economies, positive government spending shocks reduce output and the negative effect is long-lasting; differences in boom responses between aging and non-aging economies are not statistically significant.
- Magnitude examples (shock size and responses):
  - Shock size used throughout: 1 percent of GDP.
  - Linear pooled: +0.1 percent at t=0; +0.5 percent at t=4.
  - Non-aging: +0.09 percent at t=0; +0.6 percent at t=4.
  - Aging: statistically insignificant responses over 5 years.

---

### Stylized facts motivating the study
- Old-age dependency ratios have been rising for several decades and are projected to increase further; high-income countries lead the trend; middle-income countries follow with a lag.
- Projection highlight: within the next 30 years, more than 20 countries would exceed an old-age dependency ratio of 50 percent, with some reaching 70 percent (UN medium variant projections beyond 2020).
- Associated macroeconomic patterns (literature and data):
  - Growth: countries with higher old-age dependency ratios tend to have lower average growth (example fitted line: y = -13.9x + 5.6; R² = 0.52; correlation = -0.71 for average growth 2009–2018 vs. old-age dependency ratio).
  - Labor: working-age population tends to decline; labor force participation has often risen (fitted line examples: labor force growth y = -9.6x + 3.1, R² = 0.3806, correlation = -0.62; total labor force participation y = 35.4x + 65.2, R² = 0.1681, correlation = 0.41).
  - Public debt: higher old-age dependency ratios are associated with higher general government debt (% of GDP) (fitted quadratic: y = 2401.6x^2 − 896.4x + 121.73; R² = 0.5477; correlation = 0.60).

---

### Policy implications and recommendations
- Fiscal policy design in aging economies:
  - Account for weaker demand-supporting effects of fiscal policy as population aging proceeds.
  - During recessions, larger fiscal stimulus would be called for to support aggregate demand, implying the need to maintain a larger fiscal space to allow for wider swings in the fiscal position.
  - Given weak fiscal-stimulus effects even in recessions, other macroeconomic policies or structural reforms must play a more important role.
  - Policy measures to promote labor supply could help increase the output effect of fiscal stimulus in aging economies (e.g., higher retirement age, increased female labor force participation, immigration policies).
- Broader implication: rethinking macroeconomic policy design in aging economies should include fiscal, macroprudential, and structural labor-market measures given weakened fiscal multipliers.

---

*Source: INTRODUCTION (wpiea2020092-print-pdf).*

### Box 1. Would Fiscal Stimulus be Effective During Recessions in Highly Aging Economies?

### Box 1. Would Fiscal Stimulus be Effective During Recessions in Highly Aging Economies?

### Main finding on state-dependence and degree of aging
- In aging economies (with old-age dependency ratio above 22.7 percent), the output effects of fiscal spending shocks are state-dependent.
- Analysis varying the old-age dependency threshold (22 percent, 24 percent, 26 percent) shows:
  - For thresholds at 22 percent and 24 percent, estimated output effects during recessions remain almost the same as the benchmark.
  - Once the threshold is increased to 26 percent, the output effects become statistically insignificant a year after the spending shock.
- Conclusion: The demand-supporting effects of fiscal stimulus in a recession decline as population aging progresses.

### Channels: Macroeconomic interlinkages with population aging

- Model extension (equation (3)) introduces D = 1 if a variable is above its sample median, 0 otherwise, to test interactions with macro variables.
- Labor supply
  - Sample split by labor force growth median of 0.8 percent.
  - Fiscal spending shocks have a positive impact on output with higher labor force growth, and no statistically significant impact with lower labor force growth.
  - Associations in the sample:
    - 61 percent of observations in aging economies are associated with below-median labor force growth.
    - 61 percent of observations in non-aging economies come with above-median labor force growth.
  - In non-aging economies with higher labor force growth, output effects of fiscal policy shocks are positive and statistically significant; in aging economies with lower labor force growth, effects are generally insignificant.
  - Differences between these two groups of economies are statistically significant at the 1 percent level.
  - Policy implication from this channel: increasing labor supply could mitigate the adverse impact of population aging on the output effects of fiscal policy.

- Public debt
  - Sample median of public debt is 57.2 percent of GDP.
  - Sample associations:
    - 54 percent of observations in aging economies are associated with above-median public debt.
    - 53 percent of observations in non-aging economies are associated with below-median public debt.
  - Results:
    - In lower-debt countries, government spending shocks have robust (positive and statistically significant) output impacts.
    - In higher-debt countries, effects are not statistically significant.
  - Comparing aging and debt:
    - In non-aging economies with lower debt, output responses are statistically significant.
    - In aging economies with higher debt, output responses are not statistically significant.
    - Differences of estimated output effects between these two economies are statistically significant at the 5 percent level at t=0 and 1 percent level from t=1.
    - Differences between aging economies and high-debt aging economies are statistically significant at the 5 percent level at t=0 and 1 percent level from t=1.
  - Interpretation: Population aging may amplify Ricardian effects; high-debt aging economies face even weaker fiscal multipliers than high-debt non-aging economies.

### Channels: Impact on private consumption and investment
- Estimated effects of government spending shocks on private consumption and private investment using model (1) show:
  - Aging economies:
    - Effect on private consumption is not statistically significant.
    - Effect on private investment is weaker and not statistically significant.
  - Non-aging economies:
    - Effect on private consumption is positive and statistically significant.
    - Effect on private investment is positive and statistically significant.
- Interpretation: Weaker transmission to private consumption and investment in aging economies likely reflects Ricardian-type responses and lower labor supply growth.

### Robustness checks (high-level)
- Alternative measures of population aging (share of youth aged 20–29; share of working-age population) leave main results broadly unchanged.
- Smooth transition function instead of dummy variable does not change main results.
- Alternative government spending shock measures (forecasts from October previous year; April same year) leave results broadly unchanged.
- Adding current and lagged output growth innovations as controls does not change main results.
- No statistically significant difference between positive and negative shocks when controlling with a dummy for shock sign.
- Decomposition into consumption and investment spending shocks:
  - Both consumption and investment shocks have positive output effects in both aging and non-aging economies.
  - Output effects of consumption shocks are larger in non-aging economies.
  - Investment shocks have larger output effects than consumption shocks in both economies.
- Business cycle measures (growth rate, unemployment rate, output gap) do not alter main findings.
- Inclusion of control variables (lag of growth rate, lag of shocks, level of public debt, interest rates, revenue shocks) leaves main results broadly unchanged.

### Conclusion and policy implications
- Core empirical conclusions:
  - The effect of fiscal stimulus on output is weakened as population aging proceeds.
  - In economies with lower share of aged population, a positive government spending shock increases output; in economies with higher share of aged population, a government spending shock does not have a statistically significant impact on output.
  - During recessions, positive output effects in aging economies are weaker than in non-aging economies; during booms, negative output effects are more long-lasting with population aging.
  - Output effects are particularly weak in highly aging economies and in high-debt aging economies.
  - Population aging reduces impacts of fiscal stimulus on private consumption and investment via Ricardian-type responses and lower labor supply growth.

- Policy implications:
  - During recessions, a larger fiscal stimulus would be required to support aggregate demand. Stimulus packages should be designed to allow discretionary and temporary spending increases in areas with larger multipliers (e.g., capital spending).
  - A larger fiscal space may be required to allow wider swings of the fiscal position. Countries should secure sufficient fiscal space during booms and build significant fiscal space before aging progresses too far, given larger needs for social expenditures in aging economies.
  - Policy measures to promote labor supply could help increase the output effect of fiscal stimulus (e.g., stronger female labor force participation or labor-market-need-based immigration).
  - Other macroeconomic policies and structural reforms need to play a more important role in supporting domestic demand, since both monetary policy and fiscal policy effects would likely be weakened in aging economies.

*Source: Box 1, wpiea2020092-print-pdf*

### REFERENCES

### REFERENCES

### Demographics, aging, and economic growth
- Aksoy, Y., Basso, H.B., Smith, R.P, and T. Grasl, 2019, "Demographic Structure and Macroeconomic Trends," American Economic Journal: Macroeconomics, 11(1): pp. 193–222.
- Auerbach, A. J., Cai, J., and L. J. Kotlikoff, 1991, “U.S. Demographics and Saving: Predictions of Three Saving Models,” Carnegie-Rochester Conference Series on Public Policy, 34(1), pp. 135–156.
- Auerbach, A. J., Kotlikoff, L. J., Hagemann, R. P., and G. Nicoletti, 1989, “The Economic Dynamics of an Ageing Population: The Case of Four OECD Countries,” OECD Economics Department Working Papers, No. 62, OECD Publishing.
- Bloom, D. E., D. Canning, and B. Graham, 2003, “Longevity and Life-cycle Savings,” The Scandinavian Journal of Economics 105(3), pp. 319-338.
- Bloom, D. E., D. Canning, and G. Fink, 2010, “Implications of Population Ageing for Economic Growth,” Oxford Review of Economic Policy 26 (4), pp. 583–612.
- Heijdra, B.J., and J.E. Ligthart, 2006, “The Macroeconomic Dynamics of Demographic Shocks,” Macroeconomic Dynamics 10(3), pp. 349–370.
- Heijdra, B.J., and W.E. Romp, 2008, “A life-cycle overlapping-generations model of the small open economy,” Oxford Economic Papers 60(1), pp. 88–121.
- Maestas, N., Mullen J.K., and D. Powell, 2016, “The Effect of Population Aging on Economic Growth, the Labor Force, and Productivity,” National Bureau of Economic Research, Working Paper, No. 22452, http://www.nber.org/papers/w22452.
- McMorrow, K., and W. Roeger, 1999, “The Economic Consequences of Ageing Populations (A Comparison of the EU, US and Japan)” Economic Papers, No. 138, November 1999, [EU Commission - Working Document].
- Prettner, K., 2013, “Population aging and endogenous economic growth,” Journal of Population Economics, 26(2), pp. 811–834.
- Yashio, H., and K. Hachisuka, 2014, “Impact of Population Aging on the Personal Income Tax Base in Japan: Simulation Analysis of Taxation on Pension Benefits Using Micro Data,” Public Policy Review, 10(3), pp. 519–541.
- Yoshino, N., and H. Miyamoto, 2017, “Declined effectiveness of fiscal and monetary policies faced with aging population in Japan,” Japan and the World Economy, Vol. 42, pp. 32–44.
- Imam, P.A., 2013, “Shock from Graying: Is the Demographic Shift Weakening Monetary Policy Effectiveness,” IMF Working Paper, No. 13/191.
- Grob, U., and S.C. Wolter, 2007, “Demographic Change and Public Education Spending: A Conflict between Young and Old?” Education Economics, 15(3), pp. 277–292.

### Fiscal policy, fiscal multipliers, and fiscal foresight
- Auerbach, A., and Y. Gorodnichenko, 2012, “Measuring the Output Responses to Fiscal Policy,” American Economic Journal: Economic Policy 4(2): pp. 1–27.
- Auerbach, A., and Y. Gorodnichenko, 2013, “Fiscal Multipliers in Recession and Expansion,” in Fiscal Policy After the Financial Crisis, edited by Alberto Alesina and Francesco Giavazzi, University of Chicago Press, pp. 63–98.
- Barro, R. J., and C. J. Redlick, 2011, “Macroeconomic Effects from Government Purchases and Taxes,” Quarterly Journal of Economics, 126(1), pp. 51–102.
- Basso, H.S., and O. Rachedi, 2019, “The Young, the Old, and the Government: Demographics and Fiscal Multipliers,” Mimeo.
- Dell’Erba, S., Koloskova, K., and M. Poplawski-Ribeiro, 2014, “Medium-Term Fiscal Multipliers during Protracted Recessions,” IMF Working Papers 14/213, Washington, D.C.: International Monetary Fund.
- Ilzetzki, E., Mendoza, E. G., and C. A. Végh, 2013, “How Big (Small?) Are Fiscal Multipliers?” Journal of Monetary Economics, 60(2), pp. 239–54.
- Jordà, Ò., 2005, “Estimation and Inference of Impulse Responses by Local Projections,” American Economic Review 95(1), pp. 161–182.
- Kirchner, M., Cimadomo, J., and S. Hauptmeier, 2010, “Transmission of Government Spending Shocks in the Euro Area: Time Variation and Driving Forces,” ECB Working Paper Series, No. 1219, European Central Bank, Frankfurt.
- Leeper, E.M., Richter, A.W., and T.B. Walker, 2012, “Quantitative Effects of Fiscal Foresight,” American Economic Journal: Economic Policy, 4(2), pp. 115–144.
- Leeper, E.M., Walker, T.B., and S.-C.S. Yang, 2013, “Fiscal foresight and Information Flows,” Econometrica 81(3), pp. 1115–1145.
- Ramey, V.A., and S. Zubairy, 2018, “Government Spending Multipliers in Good Times and in Bad: Evidence from U.S. Historical Data,” Journal of Political Economy, 126(2), pp. 850-901.
- Dell’Erba, S., Koloskova, K., and M. Poplawski-Ribeiro, 2014, “Medium-Term Fiscal Multipliers during Protracted Recessions,” IMF Working Papers 14/213, Washington, D.C.: International Monetary Fund.
- International Monetary Fund, 2014b, “Fiscal Multipliers: Size, Determinants, and Use in Macroeconomic Projections,” Technical Notes and Manuals, No. 14/04.

### IMF publications and policy notes
- International Monetary Fund, 2014a, “Public Expenditure Reform: Making Difficult Choices,” Fiscal Monitor, April 2014.
- International Monetary Fund, 2014b, “Fiscal Multipliers: Size, Determinants, and Use in Macroeconomic Projections,” Technical Notes and Manuals, No. 14/04.
- International Monetary Fund, 2015, “The Fiscal Consequences of Shrinking Populations,” SDN/15/21, October 2015.
- International Monetary Fund, 2016a, “How to Assess Fiscal Implications of Demographic Shifts: A Granular Approach,” How to Notes, No. 16/02.
- International Monetary Fund, 2016b, “Staff Note for the G20—A Guiding Framework for Structural Reforms”, No. 16/02.
- International Monetary Fund, 2017, “Asia: At Risk of Growing Old before Becoming Rich?” Regional Economic Outlook: Asia and Pacific, April 2017.
- International Monetary Fund, 2019a, “Macroeconomics of Aging and Policy Implications.”
- International Monetary Fund, 2019b, “Demographic Headwinds in Central and Eastern Europe.”

### Monetary policy, identification, and transmission
- Boeckx, J, M. Dossche, A. Galesi, B. Hofmann, G. Peersman, 2019, “Do SVAR with sign restrictions not identify unconventional monetary policy shocks?,” BIS Working Papers No 788.
- Imam, P.A., 2013, “Shock from Graying: Is the Demographic Shift Weakening Monetary Policy Effectiveness,” IMF Working Paper, No. 13/191.
- Wong, A., 2019, “Refinancing and the Transmission of Monetary Policy to Consumption,” Mimeo.
- Yoshino, N., and H. Miyamoto, 2017, “Declined effectiveness of fiscal and monetary policies faced with aging population in Japan,” Japan and the World Economy, Vol. 42, pp. 32–44.

*Source: wpiea2020092-print-pdf - REFERENCES*

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_Source: https://www.imf.org/-/media/files/publications/wp/2020/english/wpiea2020092-print-pdf.pdf_