The Wealth of Working Nations

Jesus Fernandez-Villaverde, Gustavo Ventura () and Wen Yao
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Gustavo Ventura: Arizona State University

PIER Working Paper Archive from Penn Institute for Economic Research, Department of Economics, University of Pennsylvania

Abstract: Due to population aging, GDP growth per capita and GDP growth per working-age adult have become quite different among many advanced economies over the last several decades. Countries whose GDP growth per capita performance has been lackluster, like Japan, have done surprisingly well in terms of GDP growth per working-age adult. Indeed, from 1998 to 2019, Japan has grown slightly faster than the U.S. in terms of per working-age adult: an accumulated 31.9% vs. 29.5%. Furthermore, many advanced economies appear to be on parallel balanced growth trajectories in terms of working-age adults despite important differences in levels. Motivated by this observation, we calibrate a standard neoclassical growth model in which the growth of the working-age adult population varies in line with the data for each economy. Despite the underlying demographic differences, the calibrated model tracks output per working-age adult in most economies of our sample. Our results imply that the growth behavior of mature, aging economies is not puzzling from a theoretical perspective.

Keywords: Demographics; Growth; Developed Economies (search for similar items in EconPapers)
JEL-codes: E2 J1 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2023
New Economics Papers: this item is included in nep-age, nep-dge, nep-gro and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: The Wealth of Working Nations (2023)
Working Paper: The Wealth of Working Nations (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:pen:papers:24-002

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