Macroeconomic Effects and Policy Challenges of Population Aging
IMF Working Papers, April 1, 2006
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- Macroeconomic Effects and Policy Challenges of Population Aging
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Bibliographic details
- Authors: Hamid Faruqee, Natalia T. Tamirisa
- Published: April 1, 2006
- Series: IMF Working Papers
Summary and model
- Paper simulates macroeconomic effects of population aging using a dynamic overlapping generations model of a small open economy.
- Model calibrated to data for the Czech Republic, noted as having population aging proceeding at a pace comparable to that in other advanced countries in Europe.
- Publication details:
- By Hamid Faruqee, Natalia T. Tamirisa
- April 1, 2006
- Pages: 23
- Volume: 2006
- Issue: 095
- Series: Working Paper No. 2006/095
- Stock No: WPIEA2006095
- ISBN: 9781451863550
- ISSN: 1018-5941
Key findings
- Population aging is likely to slow economic growth.
- Population aging is likely to slow improvements in living standards.
- Reforms that raise labor force participation and productivity growth can mitigate adverse effects of aging, but:
- Such reforms are unlikely to eliminate the need for fiscal reforms.
- The budget will come under pressure from rising age-related expenditures.
- Consolidation will be needed to preserve debt sustainability.
Policy implications and recommendations
- Raise labor force participation to help offset adverse macroeconomic effects of aging.
- Raise productivity growth to help offset adverse macroeconomic effects of aging.
- Implement fiscal consolidation measures to address mounting age-related expenditures and preserve debt sustainability.
Subject and keywords
- Subject: Aging, Fiscal consolidation, Labor force participation, Labor supply, Population and demographics
- Keywords: expenditure, fertility rate, GDP, labor force, rate, WP
IMF Working Papers — "Macroeconomic Effects and Policy Challenges of Population Aging" by Hamid Faruqee and Natalia T. Tamirisa, April 1, 2006.