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OECD Countries' Twin Long-run Challenge: The Impact of Ageing Dynamics and Increasing Natural Disasters on Savings Ratios

Author

Listed:
  • Tian Xiong

    (Europäisches Institut für Internationale Wirtschaftsbeziehungen (EIIW))

  • Kaan Celebi

    (Europäisches Institut für Internationale Wirtschaftsbeziehungen (EIIW))

  • Paul J.J. Welfens

    (Europäisches Institut für Internationale Wirtschaftsbeziehungen (EIIW))

Abstract

There has been a long-standing debate over the development of savings rates in developed economies, and an emphasis has been placed on ageing societies and a global savings glut. Meanwhile, with rising global temperatures and more frequent extreme weather events becoming an increasingly visible economic and ecological global challenge, the concern of climate-related risks could indeed be an important issue in monetary and real economic analysis. This study aims to investigate the dual long-term challenge of sustainable economic development. By constructing an enhanced growth model and investigating empirically, using a panel approach which employs data from OECD countries between 1980 to 2020, the question as to the extent to which the savings rate is affected by ageing populations and environmental degradation will be addressed in a broad macro perspective. This study explores for the first time the impact of natural disasters on OECD countries and the main findings indicate that ageing populations and natural disasters have significant negative impacts on savings rates. Moreover, the analyses using sub-samples suggest a diminishing role of the real long-term interest rate regarding savings behaviour.

Suggested Citation

  • Tian Xiong & Kaan Celebi & Paul J.J. Welfens, 2021. "OECD Countries' Twin Long-run Challenge: The Impact of Ageing Dynamics and Increasing Natural Disasters on Savings Ratios," EIIW Discussion paper disbei309, Universitätsbibliothek Wuppertal, University Library.
    • Handle: RePEc:bwu:eiiwdp:disbei309
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    More about this item

    Keywords

    savings rate; ageing; natural disaster; economic growth; panel analysis; OECD;
    All these keywords.

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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