Population Aging in Japan: Demographic Shock and Fiscal Sustainability
March 1, 2001
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Summary
The paper develops a general equilibrium framework to examine the economic implications of population aging in Japan. Particular attention is paid to aggregate saving behavior which is modeled on the basis of empirical age-earnings profiles using a life-cycle approach. The paper's objectives are to (i) estimate the output loss caused by demographic changes and assess the impact of aging on Japan's government finances; and (ii) compare fiscal policy options with respect to their effects on output growth and economic welfare. The paper develops a general equilibrium framework to examine the economic implications of population aging in Japan. Particular attention is paid to aggregate saving behavior which is modeled on the basis of empirical age-earnings profiles using a life-cycle approach. The paper's objectives are to (i) estimate the output loss caused by demographic changes and assess the impact of aging on Japan's government finances; and (ii) compare fiscal policy options with respect to their effects on output growth and economic welfare. The paper develops a general equilibrium framework to examine the economic implications of population aging in Japan. Particular attention is paid to aggregate saving behavior which is modeled on the basis of empirical age-earnings profiles using a life-cycle approach. The paper's objectives are to (i) estimate the output loss caused by demographic changes and assess the impact of aging on Japan's government finances; and (ii) compare fiscal policy options with respect to their effects on output growth and economic welfare.
Subject: Aging, Demographic change, Financial institutions, Labor, Population and demographics, Securities, Wages
Keywords: A. Age-earnings profile, age-earnings profile, aging, cyclical position, debt situation, Demographic change, earnings, earnings difference, fiscal policy, general equilibrium analysis, Global, Japan, Japan block, life-cycle earnings profile, pension liability, saving, Securities, Wages, WP
Pages:
29
Volume:
2001
DOI:
Issue:
040
Series:
Working Paper No. 2001/040
Stock No:
WPIEA0402001
ISBN:
9781451845976
ISSN:
1018-5941
