ECONOMIC CONSEQUENCES OF POPULATION AGING IN JAPAN: EFFECTS THROUGH CHANGES IN DEMAND STRUCTURE

Mitsuru Katagiri ()
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Mitsuru Katagiri: Hosei University, 2 Chome-17-1 Fujimi, Chiyoda City, Tokyo 102-8160, Japan

The Singapore Economic Review (SER), 2021, vol. 66, issue 06, 1709-1731

Abstract: In this paper, I investigate the effects of changes in demand structure caused by population aging on the Japanese economy using a multi-sector new Keynesian model with job creation/destruction analysis. I consider upward revisions in forecast for the speed of Japanese population aging as unexpected shocks to its demand structure. I find that the shocks caused around 0.3% point deflationary pressure on year-to-year inflation, 0.3% to 0.4% point increase in unemployment rates, and 1.8% point decrease in real GDP from the early 1990s to the 2000s in Japan. I also find that the repetition of such upward revisions made those effects look more persistent.

Keywords: Population aging; matching; productivity; deflation (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1142/S0217590818420067

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