Demographics and Their Implications for the Economy and Policy; 11.16.17; Cato Institute's 35th Annual Monetary Conference: The Future of Monetary Policy, Washington, DC

Loretta Mester

No 88, Speech from Federal Reserve Bank of Cleveland

Abstract: As the economy has moved from financial crisis and the Great Recession to sustainable expansion, attention has shifted from cyclical aspects of the economy to structural factors. As policy has begun to normalize, the question has been raised: ?what is normal?? To answer such a question, we need to understand how the underlying fundamentals of the economy are evolving. A critical factor is demographics. Demographic change can influence the underlying growth rate of the economy, structural productivity growth, living standards, savings rates, consumption, and investment; it can influence the long-run unemployment rate and equilibrium interest rate, housing market trends, and the demand for financial assets. Moreover, differences in demographic trends across countries can be expected to influence current account balances and exchange rates. So to understand the global economy, it helps to understand changing demographics and the challenges they pose for monetary and fiscal policymakers.

Keywords: demographics; labor markets; fiscal policy; monetary policy (search for similar items in EconPapers)
Pages: 16 pages
Date: 2017-11-16
New Economics Papers: this item is included in nep-dem
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