Impact of Demographic Changes on Inflation and the Macroeconomy

By Jong-Won Yoon, Jinill Kim, Jungjin Lee

November 24, 2014

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Format: Chicago

Jong-Won Yoon, Jinill Kim, and Jungjin Lee. Impact of Demographic Changes on Inflation and the Macroeconomy, (USA: International Monetary Fund, 2014) accessed September 18, 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 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.

Subject: Aging, Demographic change, Health, Population and demographics, Population growth

Keywords: Aging, Demographic change, Demographic Changes, Fertility rate, Fiscal Policy, GDP, Global, Inflation, Inflation behavior, Influence saving, Life expectancy, Macroeconomic Impact, Monetary Policy, Population Aging, Population change, Population growth, Population share, Savings and Investment, Share, Share variable, Terms of trade, WP

Publication Details

Pages:

31
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2014/210
Stock No:

WPIEA2014210
ISBN:

9781498396783
ISSN:

1018-5941

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