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Medium-term forecasts of potential GDP and inflation using age structure information

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  • Thomas Lindh

    (Uppsala University, Sweden, and Institute for Futures Studies, Stockholm, Sweden)

Abstract

Economic behaviour as well as economic resources of individuals vary with age. Swedish time series show that the age structure contains information correlated to medium-term trends in growth and inflation. GDP gaps estimated by age structure regressions are closely related to conventional measures. Monetary policy is believed to affect inflation with a lag of 1 or 2 years. Projections of the population's age structure are comparatively reliable several years ahead and provide additional information to improve on 3-5 years-ahead forecasts of potential GDP and inflation. Thus there is a potential scope for using age structure based forecasts as an aid to monetary policy formation. Copyright © 2004 John Wiley & Sons, Ltd.

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File URL: http://hdl.handle.net/10.1002/for.906
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Bibliographic Info

Article provided by John Wiley & Sons, Ltd. in its journal Journal of Forecasting.

Volume (Year): 23 (2004)
Issue (Month): 1 ()
Pages: 19-49

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Handle: RePEc:jof:jforec:v:23:y:2004:i:1:p:19-49

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Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/2966

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Cited by:
  1. Prskawetz, A. & Kogel, T. & Sanderson, W.C. & Scherbov, S., 2007. "The effects of age structure on economic growth: An application of probabilistic forecasting to India," International Journal of Forecasting, Elsevier, vol. 23(4), pages 587-602.
  2. John W. Galbraith & Greg Tkacz, 2007. "How Far Can Forecasting Models Forecast? Forecast Content Horizons for Some Important Macroeconomic Variables," Working Papers 07-1, Bank of Canada.
  3. Bruér, Mattias, 2002. "Can Demography Improve Inflation Forecasts? The Case of Sweden," Working Paper Series 2002:4, Uppsala University, Department of Economics.
  4. Kappler, Marcus, 2007. "Projecting the Medium-Term: Outcomes and Errors for GDP Growth," ZEW Discussion Papers 07-068, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  5. Lindh, Thomas & Malmberg, Bo, 2007. "Demographically based global income forecasts up to the year 2050," International Journal of Forecasting, Elsevier, vol. 23(4), pages 553-567.
  6. Andreas Andersson & Par Osterholm, 2005. "Forecasting real exchange rate trends using age structure data - the case of Sweden," Applied Economics Letters, Taylor & Francis Journals, vol. 12(5), pages 267-272.
  7. Österholm, Pär, 2004. "Estimating the Relationship between Age Structure and GDP in the OECD Using Panel Cointegration Methods," Working Paper Series 2004:13, Uppsala University, Department of Economics.
  8. Tobias Kitlinski & Torsten Schmidt, 2011. "The Forecasting Performance of an Estimated Medium Run Model," Ruhr Economic Papers 0301, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  9. Torsten Schmidt & Helmut Hofer & Klaus Weyerstrass, 2010. "Practice and Prospects of Medium-term Economic Forecasting," Ruhr Economic Papers 0177, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  10. Thomas Lindh & Bo Malmberg, 2009. "European Union economic growth and the age structure of the population," Economic Change and Restructuring, Springer, vol. 42(3), pages 159-187, August.
  11. Andreas Andersson & Par Osterholm, 2006. "Population age structure and real exchange rates in the OECD," International Economic Journal, Taylor & Francis Journals, vol. 20(1), pages 1-18.
  12. Andersson, Andreas & Österholm, Pär, 2001. "The Impact of Demography on the Real Exchange Rate," Working Paper Series 2001:11, Uppsala University, Department of Economics.

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