The Young, the Old, and the Restless: Demographics and Business Cycle Volatility

Henry Siu and Nir Jaimovich

No 815, 2006 Meeting Papers from Society for Economic Dynamics

Abstract: In this paper we investigate the consequences of demographic change for business cycle analysis. We find that changes in the age composition of the labor force account for a significant fraction of the variation in business cycle volatility observed in the US and other G7 economies. During the postwar period, these countries have experienced dramatic demographic change, though details regarding extent and timing differ from place to place. Using panel data methods, we exploit this variation to show that the age composition of the workforce has a large and statistically significant effect on cyclical volatility. We conclude by relating these findings to the recent decline in US business cycle volatility. Through simple quantitative accounting exercises, we find that demographic change accounts for a significant part of this moderation

Keywords: business; cycles (search for similar items in EconPapers)
JEL-codes: E20 (search for similar items in EconPapers)
Date: 2006
New Economics Papers: this item is included in nep-bec, nep-dge and nep-mac
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: The Young, the Old, and the Restless: Demographics and Business Cycle Volatility (2009)
Working Paper: The Young, the Old, and the Restless: Demographics and Business Cycle Volatility (2008)
Working Paper: The young, the old, and the restless: demographics and business cycle volatility (2007)
Working Paper: The Young, the Old, and the Restless: Demographics and Business Cycle Volatility (2007)
Working Paper: The Young, the Old, and the Restless: Demographics and Business Cycle Volatility (2007)
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