Aging and Economic Growth: The Role of Factor Markets and of Fundamental Pension Reforms

Alexander Ludwig

No 5094, MEA discussion paper series from Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy

Abstract: This paper analyzes the implications of demographic change for economic growth in di®erent countries. Quantitative projections are based on a multi-country over- lapping generations model that is augmented with actual demographic data and pro- jections for di®erent OECD regions. According to the simulation results, per capita incomes decline substantially when aging processes peak in some regions and di®er- ences between regions are quite large. Additional capital formation and increases in labor supply resulting from a fundamental pension reform are found to mitigate but not to solve the problem.

JEL-codes: E27 E62 F21 H55 J11 (search for similar items in EconPapers)
Date: 2005-08-30
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Citations: View citations in EconPapers (10)

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