Debt Sustainability in the Context of Population Ageing: A Risk Management Approach

Samantha Ajovalasit, Andrea Consiglio () and Davide Provenzano
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Samantha Ajovalasit: Department of Economics, Business, and Statistics, University of Palermo, Viale delle Scienze, 90128 Palermo, Italy
Andrea Consiglio: Department of Economics, Business, and Statistics, University of Palermo, Viale delle Scienze, 90128 Palermo, Italy
Davide Provenzano: Department of Economics, Business, and Statistics, University of Palermo, Viale delle Scienze, 90128 Palermo, Italy

Risks, 2024, vol. 12, issue 12, 1-23

Abstract: The ageing of the population has negative effects on the gross domestic product (GDP), influencing various economic and social aspects. These effects, in turn, contribute to an increase in the debt-to-GDP ratio, raising concerns about the long-term sustainability of public debt. The objective of our study is to evaluate the possible dynamics of debt sustainability with a certain level of probability. The analysis employs the stochastic modelling of risk factors influencing the debt-to-GDP ratio, particularly emphasising the economic consequences of population ageing. Using advanced risk management techniques, we aim to provide a robust assessment of how future demographic outlooks impact debt sustainability.

Keywords: debt sustainability analysis; population ageing; stochastic optimisation; risk management (search for similar items in EconPapers)
JEL-codes: C G0 G1 G2 G3 K2 M2 M4 (search for similar items in EconPapers)
Date: 2024
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