Demographics and the Secular Stagnation Hypothesis in Europe

Carlo Favero and Vincenzo Galasso

No 10887, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Demographic trends in Europe do not support empirically the secular stagnation hypothesis. Our evidence shows that the age structure of population generates less long-term growth but positive real rates. Policies for growth become very important. We assess the relevance of the demographic structure for the choice between macro adjustements and structural reforms. We show that middle aged and elderly individuals have a more negative view of reforms, competitiveness and globalization than young. Our results suggest that older countries -- in terms of share of elderly people -- should lean more towards macroeconomic adjustments, whereas younger nations will be more supportive of structural reforms.

Keywords: Europe; Growth; Real interest rates; Stochastic mortality (search for similar items in EconPapers)
JEL-codes: J11 J14 (search for similar items in EconPapers)
Date: 2015-10
New Economics Papers: this item is included in nep-age, nep-eec and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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