IDEAS home Printed from https://ideas.repec.org/p/wap/wpaper/2121.html
   My bibliography  Save this paper

Aging, Fertility and Macroeconomic Dynamics

Author

Listed:
  • Aurelien Eyquem

    (Univ Lyon, Université Lumière Lyon 2, GATE UMR 5824, F-69130 Ecully, France; Institut Universitaire de France.)

  • Masahige Hamano

    (Faculty of Political Science and Economics, Waseda University, 1-6-1 Nishiwaseda Shinjuku-ku, Tokyo 169-8050, Japan.)

Abstract

A tractable model with heterogeneous households is proposed to analyze the two-way interactions between demographic and macroeconomic variables. Total population and labor market participation are both endogenous and affected by economic as well as demographic factors.In addition, demographic factors have direct effects on aggregate productivity through selection effects on the labor market. We show that aging and negative fertility shocks have opposite predictions in terms of their effects on GDP per capita and aggregate productivity.A quantitative exercise based on Japanese data suggests that an aging shock alone has relatively little effects and falls short in replicating the data, while considering negative fertility shocks fits the data much better.

Suggested Citation

  • Aurelien Eyquem & Masahige Hamano, 2022. "Aging, Fertility and Macroeconomic Dynamics," Working Papers 2121, Waseda University, Faculty of Political Science and Economics.
    • Handle: RePEc:wap:wpaper:2121
    as

    Download full text from publisher

    File URL: https://www.waseda.jp/fpse/winpec/assets/uploads/2022/02/E2121.pdf
    File Function: First version,
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Cooley, Thomas & Henriksen, Espen, 2018. "The demographic deficit," Journal of Monetary Economics, Elsevier, vol. 93(C), pages 45-62.
    2. Fabio Ghironi & Marc J. Melitz, 2005. "International Trade and Macroeconomic Dynamics with Heterogeneous Firms," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 120(3), pages 865-915.
    3. Masashige Hamano & Francesco Zanetti, 2017. "Endogenous Turnover and Macroeconomic Dynamics," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 26, pages 263-279, October.
    4. Jonathan Heathcote & Kjetil Storesletten & Giovanni L. Violante, 2009. "Quantitative Macroeconomics with Heterogeneous Households," Annual Review of Economics, Annual Reviews, vol. 1(1), pages 319-354, May.
    5. Greg Kaplan & Giovanni L. Violante, 2018. "Microeconomic Heterogeneity and Macroeconomic Shocks," Journal of Economic Perspectives, American Economic Association, vol. 32(3), pages 167-194, Summer.
    6. Finn Kydland & Nicholas Pretnar, 2018. "The Costs and Benefits of Caring: Aggregate Burdens of an Aging Population," 2018 Meeting Papers 271, Society for Economic Dynamics.
    7. Bergeaud, A. & Cette, G. & Lecat, R., 2015. "Productivity trends from 1890 to 2012 in advanced countries," Rue de la Banque, Banque de France, issue 07, June..
    8. Katagiri, Mitsuru & Konishi, Hideki & Ueda, Kozo, 2020. "Aging and deflation from a fiscal perspective," Journal of Monetary Economics, Elsevier, vol. 111(C), pages 1-15.
    9. McGrattan, Ellen R. & Prescott, Edward C., 2018. "An aggregate model for policy analysis with demographic change," The Journal of the Economics of Ageing, Elsevier, vol. 11(C), pages 52-61.
    10. Kitao, Sagiri, 2015. "Fiscal cost of demographic transition in Japan," Journal of Economic Dynamics and Control, Elsevier, vol. 54(C), pages 37-58.
    11. Antonin Bergeaud & Gilbert Cette & Rémy Lecat, 2016. "Productivity Trends in Advanced Countries between 1890 and 2012," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 62(3), pages 420-444, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Stéphane Auray & Aurélien Eyquem, 2021. "Heterogeneity, convergence and imbalances in the Euro area," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(3), pages 117-152.
    2. Cette, Gilbert & Corde, Simon & Lecat, Rémy, 2018. "Firm-level productivity dispersion and convergence," Economics Letters, Elsevier, vol. 166(C), pages 76-78.
    3. Pamfili Antipa & Vincent Bignon, 2018. "Whither Economic History? Between Narratives and Quantification," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(3), pages 17-36.
    4. Fabio Ghironi, 2018. "Macro needs micro," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 34(1-2), pages 195-218.
    5. Monacelli, Tommaso & Sala, Luca & Siena, Daniele, 2023. "Real interest rates and productivity in small open economies," Journal of International Economics, Elsevier, vol. 142(C).
    6. José Díaz‐Bahamonde & Gert Wagner, 2020. "Productivity and Growth in Perspective: Chile, 1833–2010," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 66(4), pages 997-1030, December.
    7. Stéphane Auray & Aurélien Eyquem & Bertrand Garbinti & Jonathan Goupille-Lebret, 2022. "Markups, Taxes, And Rising Inequality," Working Papers halshs-03832267, HAL.
    8. HAMANO Masashige & OKUBO Toshihiro, 2021. "In Search of Lost Time: Firm Vintage and Macroeconomic Dynamics," Discussion papers 21015, Research Institute of Economy, Trade and Industry (RIETI).
    9. Oscar Jorda & Alan Taylor & Sanjay Singh, 2019. "The Long-Run Effects of Monetary Policy," 2019 Meeting Papers 1307, Society for Economic Dynamics.
    10. Miguel Casares Polo & Hashmat Khan & Jean-Christophe Poutineau, 2018. "A structural analysis of US entry and exit dynamics," Documentos de Trabajo - Lan Gaiak Departamento de Economía - Universidad Pública de Navarra 1801, Departamento de Economía - Universidad Pública de Navarra.
    11. Jorge Antunes & Goodness C. Aye & Rangan Gupta & Peter Wanke & Yong Tan, 2020. "Endogenous Long-Term Productivity Performance in Advanced Countries: A Novel Two-Dimensional Fuzzy-Monte Carlo Approach," Working Papers 2020111, University of Pretoria, Department of Economics.
    12. Madeira, Carlos & Salazar, Leonardo, 2023. "The impact of monetary policy on a labor market with heterogeneous workers: The case of Chile," Latin American Journal of Central Banking (previously Monetaria), Elsevier, vol. 4(2).
    13. Iñigo Calvo-Sotomayor & Ekhi Atutxa & Ricardo Aguado, 2020. "Who Is Afraid of Population Aging? Myths, Challenges and an Open Question from the Civil Economy Perspective," IJERPH, MDPI, vol. 17(15), pages 1-17, July.
    14. Charles M. A. Clark & Aleksandr V. Gevorkyan, 2020. "Artificial Intelligence and Human Flourishing," American Journal of Economics and Sociology, Wiley Blackwell, vol. 79(4), pages 1307-1344, September.
    15. Teichgraeber, Andreas & Van Reenen, John, 2022. "A policy toolkit to increase research and innovation in the European Union," LSE Research Online Documents on Economics 117801, London School of Economics and Political Science, LSE Library.
    16. Kiley, Michael T., 2021. "What macroeconomic conditions lead financial crises?," Journal of International Money and Finance, Elsevier, vol. 111(C).
    17. Nauro F Campos & Fabrizio Coricelli, 2017. "EU Membership, Mrs Thatcher’s Reforms and Britain’s Economic Decline," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 59(2), pages 169-193, June.
    18. Thomas Grebel & Mauro Napoletano & Lionel Nesta, 2023. "Distant but Close in Sight: Firm‐level Evidence on French–German Productivity Gaps in Manufacturing," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 69(1), pages 228-261, March.
    19. Nicholas Crafts, 2021. "The Sources Of British Economic Growth Since The Industrial Revolution: Not The Same Old Story," Journal of Economic Surveys, Wiley Blackwell, vol. 35(3), pages 697-709, July.
    20. John C. Williams, 2019. "If we fail to prepare, we prepare to rail: remarks at Council on Foreign Relations, New York City," Speech 323, Federal Reserve Bank of New York.

    More about this item

    Keywords

    Heterogeneous workers; Aging; Productivity; Labor markets.;
    All these keywords.

    JEL classification:

    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wap:wpaper:2121. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Haruko Noguchi (email available below). General contact details of provider: https://edirc.repec.org/data/spwasjp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.