Macroeconomic Effects and Policy Challenges of Population Aging
Electronic Access:
Free Download. Use the free Adobe Acrobat Reader to view this PDF file
Summary:
This paper simulates the macroeconomic effects of population aging in a dynamic overlapping generations model of a small open economy. The model is calibrated to data for the Czech Republic, where population aging is proceeding at a pace comparable to that in other advanced countries in Europe. Simulations show that population aging is likely to slow economic growth and improvements in living standards. Although reforms to raise labor force participation and productivity growth can mitigate these adverse effects, they are unlikely to eliminate the need for fiscal reforms. The budget will come under pressure from rising age-related expenditures, and consolidation will be needed to preserve debt sustainability.
Series:
Working Paper No. 2006/095
Subject:
Aging Fiscal consolidation Labor force participation Labor supply Population and demographics
English
Publication Date:
April 1, 2006
ISBN/ISSN:
9781451863550/1018-5941
Stock No:
WPIEA2006095
Pages:
23
Please address any questions about this title to publications@imf.org