IMF Working Papers

Population Aging in Japan: Demographic Shock and Fiscal Sustainability

By Martin Mühleisen, Hamid Faruqee

March 1, 2001

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Martin Mühleisen, and Hamid Faruqee. Population Aging in Japan: Demographic Shock and Fiscal Sustainability, (USA: International Monetary Fund, 2001) accessed October 7, 2024
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 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

Publication Details

  • Pages:

    29

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

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  • Series:

    Working Paper No. 2001/040

  • Stock No:

    WPIEA0402001

  • ISBN:

    9781451845976

  • ISSN:

    1018-5941