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Demography, Capital Accumulation and Growth

Author

Listed:
  • Robert Stehrer

    (The Vienna Institute for International Economic Studies, wiiw)

  • Maryna Tverdostup

    (The Vienna Institute for International Economic Studies, wiiw)

Abstract

Europe will be challenged by demographic changes over the next few decades, even under favourable assumptions about fertility and migration, but the economic effects are not yet fully understood. This paper studies the effects of population ageing on economic growth, capital deepening and robotisation in 27 European Union (EU) labour markets. First, we econometrically assess the effects of ageing and potential labour market shortages on growth. Second, we test the hypothesis of whether ageing leads to faster adoption of new technologies. We distinguish between various capital asset types, including non-ICT and ICT capital, tangible and intangible capital and the adoption of robots. The analysis is based on Eurostat, the European Labour Force Survey (EU-LFS) and International Federation of Robotics (IFR) data. Results indicate that ageing and demographic changes might contribute to secular stagnation, which decelerates the adoption of new technologies.

Suggested Citation

  • Robert Stehrer & Maryna Tverdostup, 2022. "Demography, Capital Accumulation and Growth," wiiw Working Papers 222, The Vienna Institute for International Economic Studies, wiiw.
    • Handle: RePEc:wii:wpaper:222
    as

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    References listed on IDEAS

    as
    1. Abeliansky, Ana Lucia & Prettner, Klaus, 2017. "Automation and demographic change," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168215, Verein für Socialpolitik / German Economic Association.
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    3. Prettner, Klaus, 2019. "A Note On The Implications Of Automation For Economic Growth And The Labor Share," Macroeconomic Dynamics, Cambridge University Press, vol. 23(3), pages 1294-1301, April.
    4. Daron Acemoglu & Pascual Restrepo, 2017. "Secular Stagnation? The Effect of Aging on Economic Growth in the Age of Automation," American Economic Review, American Economic Association, vol. 107(5), pages 174-179, May.
    5. James Feyrer, 2007. "Demographics and Productivity," The Review of Economics and Statistics, MIT Press, vol. 89(1), pages 100-109, February.
    6. Yoram Ben-Porath, 1967. "The Production of Human Capital and the Life Cycle of Earnings," Journal of Political Economy, University of Chicago Press, vol. 75(4), pages 352-352.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    aging; growth; capital accumulation; new technologies; secular stagnation;
    All these keywords.

    JEL classification:

    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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