## Macroeconomic Effects and Policy Challenges of Population Aging

_IMF Working Papers, April 1, 2006_

## Source details

**Canonical URL:** [Macroeconomic Effects and Policy Challenges of Population Aging](https://www.imf.org/en/publications/wp/issues/2016/12/31/macroeconomic-effects-and-policy-challenges-of-population-aging-18947)

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## Bibliographic details
- Authors: Hamid Faruqee, Natalia T. Tamirisa
- Published: April 1, 2006
- Series: IMF Working Papers

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### 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.*

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/macroeconomic-effects-and-policy-challenges-of-population-aging-18947_