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Aging, Output Per Capita, and Secular Stagnation

Gauti Eggertsson (), Manuel Lancastre and Lawrence H. Summers

American Economic Review: Insights, 2019, vol. 1, issue 3, 325-42

Abstract: This paper re-examines the relationship between population aging and economic growth. We confirm previous research such as Cutler et al. (1990) and Acemoglu and Restrepo (2017) that show positive correlation between population aging and per capita output growth. Our contribution is demonstrating that this relationship breaks down when the adjustment of interest rates is inhibited by a lower bound on nominal rates, as during the Great Financial Crisis decade. Indeed, during the "secular stagnation regime" of 2008–2015 that prevailed in a number of countries, aging had a negative impact on living standards, consistent with the secular stagnation hypothesis.

JEL-codes: E23 E32 E43 G01 I31 J14 (search for similar items in EconPapers)
Date: 2019
Note: DOI: 10.1257/aeri.20180383
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