Demographics and Current Account Imbalances: Accounting for the Full Age Distribution

Miriam Koomen and Laurence Wicht

IMF Economic Review, 2023, vol. 71, issue 3, No 6, 719-758

Abstract: Abstract This paper investigates the relationship between demographics and the current account (CA) employing a polynomial measure that considers the full age distribution. Using a panel of 49 countries over 30 years of data, the polynomial produces economically more intuitive and stable results than previously used demographics measures. We find strong and robust non-linear effects. Specifically, we find that a relatively larger share of young cohorts is correlated with a lower CA, while a larger share of working-age cohorts is correlated with a higher CA. Our results show that disregarding any age group may fail to account for the full demographic effect on the CA over time and across countries. Accounting for the full age distribution thus allows to explain a larger share of observed CA surpluses and deficits.

JEL-codes: F32 F41 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1057/s41308-022-00176-6 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:imfecr:v:71:y:2023:i:3:d:10.1057_s41308-022-00176-6

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/41308/PS2

DOI: 10.1057/s41308-022-00176-6

Access Statistics for this article

More articles in IMF Economic Review from Palgrave Macmillan, International Monetary Fund
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().