Population Ageing and the Macroeconomy

Noëmie Lisack, Rana Sajedi and Gregory Thwaites

Working papers from Banque de France

Abstract: We quantify the impact of demographic change on real interest rates, house prices and household debt in an overlapping-generations model. Falling birth and death rates across advanced economies can explain much of the observed fall in real interest rates and the rise in house prices and household debt. Since households maintain relatively high wealth levels throughout retirement, these trends will persist as population ageing continues. Countries ageing relatively slowly, like the US, will increasingly accumulate net foreign liabilities. The availability of housing as an alternative store of value attenuates these trends, while raising the retirement age has limited effects.

Keywords: : Demographics; ageing; natural interest rates; macroeconomic trends. (search for similar items in EconPapers)
JEL-codes: E13 E21 E43 J11 (search for similar items in EconPapers)
Pages: 53 pages
Date: 2019
New Economics Papers: this item is included in nep-age, nep-dem, nep-dge and nep-mac
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https://publications.banque-france.fr/sites/defaul ... /documents/wp745.pdf

Related works:
Journal Article: Population Aging and the Macroeconomy (2021)
Working Paper: Population Aging and the Macroeconomy (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:bfr:banfra:745

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