The Impact of Demographics on Productivity and Inflation in Japan

 
Author/Editor: Mr. Niklas J Westelius ; Yihan Liu
 
Publication Date: December 08, 2016
 
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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: Is Japan’s aging and, more recently, declining population hampering growth and reflation efforts? Exploiting demographic and economic variation in prefectural data between 1990 and 2007, we find that aging of the working age population has had a significant negative impact on total factor productivity. Moreover, prefectures that aged at a faster pace experienced lower overall inflation, while prefectures with higher population growth experienced higher inflation. The results give strong support to the notion that demographic headwinds can have a non-trivial impact on total factor productivity and deflationary pressures.
 
Series: Working Paper No. 16/237
Subject(s): Demographic transition | Japan | Aging | Population growth | Inflation | Total factor productivity

 
English
Publication Date: December 08, 2016
ISBN/ISSN: 9781475559712/1018-5941 Format: Paper
Stock No: WPIEA2016237 Pages: 18
Price:
US$18.00 (Academic Rate:
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