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

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  • Kopecky, Joseph

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.

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  • Kopecky, Joseph, 2023. "Population age structure and secular stagnation: Evidence from long run data," The Journal of the Economics of Ageing, Elsevier, vol. 24(C).
    • Handle: RePEc:eee:joecag:v:24:y:2023:i:c:s2212828x23000026
    DOI: 10.1016/j.jeoa.2023.100442
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