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Population age structure and secular stagnation: Evidence from long run data

Joseph Kopecky Author-1-Name-First: Joseph Author-1-Name-Last: Kopecky ()
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Joseph Kopecky Author-1-Name-First: Joseph Author-1-Name-Last: Kopecky: Trinity College Dublin

No tep0526, Economic Papers from Trinity College Dublin, Economics Department

Abstract: A large literature has reopened the secular stagnation hypothesis, first proposed near the end of the great depression as a warning for anemic growth resulting from long run trends in population aging. In this paper, I explore the relationship between population age structure and growth in: investment, consumption and output, in a long run panel of advanced economies. The evidence is largely consistent with proposed channels for secular stagnation. Investment growth, in its level and as a fraction of GDP, appears much stronger in young populations, while facing demographic headwinds in older economies. Consumption and output growth are positively associated with late career workers, with a negative relationship coming from both young and old dependents. Consistent with the recent secular stagnation literature, interest rate channels appear to have strong interactions with population age structures. I find that for investment and output growth, estimated impacts of age-structure are more pronounced in low interest rate environments, with high rates mitigating some of their effect.

Keywords: Secularstagnation; Demographictransition; populationaging; economicgrowth (search for similar items in EconPapers)
JEL-codes: B22 E20 J11 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2023-01
New Economics Papers: this item is included in nep-age, nep-des and nep-mac
References: View references in EconPapers View complete reference list from CitEc
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Published Paper: Journal of the Economics of Ageing

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