Medium-term forecasts of potential GDP and inflation using age structure information

Thomas Lindh

Journal of Forecasting, 2004, vol. 23, issue 1, 19-49

Abstract: Economic behaviour as well as economic resources of individuals vary with age. Swedish time series show that the age structure contains information correlated to medium-term trends in growth and inflation. GDP gaps estimated by age structure regressions are closely related to conventional measures. Monetary policy is believed to affect inflation with a lag of 1 or 2 years. Projections of the population's age structure are comparatively reliable several years ahead and provide additional information to improve on 3-5 years-ahead forecasts of potential GDP and inflation. Thus there is a potential scope for using age structure based forecasts as an aid to monetary policy formation. Copyright © 2004 John Wiley & Sons, Ltd.

Date: 2004
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Working Paper: Medium-Term Forecasts of Potential GDP and Inflation Using Age Structure Information (1999)
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Persistent link: https://EconPapers.repec.org/RePEc:jof:jforec:v:23:y:2004:i:1:p:19-49

DOI: 10.1002/for.906

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