Trade effects of demographic transition and population aging – a simulation by the dynamic GTAP model

Masahiro Omura

No 332296, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: A simulation by the dynamic GTAP model was conducted to shed more light on the economic effects of the demographic trend in the future in order to promote awareness and preparedness towards this phenomenon. In a country where population aging proceeds rapidly like Japan, market price of capital will remain relatively high, and thus market prices of goods and services are relatively high, which in turn brings about deteriorating trade deficit. Population aging will cause decrease in savings, which in turn will increase price of capital. To cope with such a situation, measures such as postponement of retirement age and those to control government liabilities may be required.

Keywords: International Relations/Trade; Public Economics (search for similar items in EconPapers)
Pages: 16
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:332296

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