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Scandinavian Evidence on Growth and Age Structure

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Author Info
Björn Andersson
Abstract

The age distribution is seldom taken into consideration in macroeconometric papers in spite of the fact that established economic theories predict that demographic factors will affect the aggregate economy. This paper investigates empirically the influence of age variables on growth. Unlike recent papers on the subject, the focus here is on investigating the relationship on annual data for individual Scandinavian countries. Estimations of a typical growth specification, augmented with age variables, are run and the results indicate that economic growth is indeed affected by the age distribution, where the demographic structure catches the mediumrun trend in the growth rate. The robustness of this finding is first checked by instrumental-variable regressions to control for the potential endogeneity of the economic variables, and then by running ridge regressions to mitigate the collinearity between the age variables Rarement les études macro-économiques considèrent la distribution de la population par âge, malgré que les idées reÇues prédisent que les facteurs démographiques influent sur l'économie globale. Cet article cherche à examiner empiriquement l'impact sur la croissance des variables relatives à l'âge. Contrairement a ¤ des articles récents à ce sujet, cet article porte sur le rapport avec des données annuelles pour des pays scandinaves. On évalue la croissance en fonction des spécifications type, augmentées par des variables relatives à l'âge, et les résultats laissent voir que la croissance économique est influencée par la distribution de la population par âge, là où la démographie capte la tendance à moyen terme du taux de croissance. On vérifie la fiabilité de cette conclusion, en premier en employant des régressions à variables productives afin de contrôler la possibilité que les variables soient endogènes, et en deuxième en employant des régressions en rangées pour réduire la colinéarité entre les variables relatives à l'âge. Obwohl anerkannte Wirtschaftstheorien vorhersagen, daß demographische Faktoren sich auf die Gesamtwirtschaft auswirken werden, wird die Altersstruktur bei makro-ökonomischen Abhandlungen selten berücksichtigt. Dieser Aufsatz untersucht den Einfluß von Altersvariablen auf Wirtschaftswachstum auf empirische Weise. Anders als bei kürzlich veröffentlichten Aufsätzen zu diesem Thema richtet sich die Aufmerksamkeit hier auf das oben erwähnte Verhältnis in Bezug auf Jahresangaben für einzelne skandinavische Länder. Es werden Schätzungen einer typischen Wachstumsangabe mit zusätzlichen Altersvariablen durchgeführt, und die Ergebnisse zeigen an, daß Wirtschaftswachstum tatsächlich zu dem Zeitpunkt von der Altersstruktur betroffen wird, wo die demographische Struktur die mittelfristige Tendenz der Wachstumsrate einholt. Die Aussagekraft dieses Befundes wird zunächst durch instrumentalvariable Regressionen überprüft, als Kontrolle für die potentiale Endogenität der wirtschaftlichen Variablen, und dann mittels Durchführung von Regressionen zur Hinderung der linearen Parallelität der Altersvariablen.

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Article provided by Taylor and Francis Journals in its journal Regional Studies.

Volume (Year): 35 (2001)
Issue (Month): 5 (July)
Pages: 377-390
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Handle: RePEc:taf:regstd:v:35:y:2001:i:5:p:377-390

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Keywords: Economic Growth Demography Scandanavian Countries Croissance Economique Demographie Pays Scandinaves Wirtschaftswachstum Demographie Skandinavische Lander;

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References listed on IDEAS
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  1. Berg, Lennart, 1996. "Age Distribution, Saving and Consumption in Sweden," Working Paper Series 1996:22, Uppsala University, Department of Economics. [Downloadable!]
  2. McMillan, Henry M. & Baesel, Jerome B., 1990. "The macroeconomic impact of the baby boom generation," Journal of Macroeconomics, Elsevier, vol. 12(2), pages 167-195. [Downloadable!] (restricted)
  3. Ray C. Fair & Kathryn M. Dominguez, 1987. "Effects of the Changing U.S. Age Distribution on Macroeconomic Equations," Cowles Foundation Discussion Papers 839, Cowles Foundation, Yale University. [Downloadable!]
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  4. Gary S. Becker, 1962. "Investment in Human Capital: A Theoretical Analysis," Journal of Political Economy, University of Chicago Press, vol. 70, pages 9. [Downloadable!] (restricted)
  5. Magnus Blomstrom & Robert E. Lipsey & Mario Zejan, 1996. "Is Fixed Investment the Key to Economic Growth?," NBER Working Papers 4436, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  6. Steven N. Durlauf & Danny T. Quah, 1998. "The New Empirics of Economic Growth," NBER Working Papers 6422, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  7. Lindh, Thomas & Malmberg, Bo, 1999. "Age Distributions and the Current Account -A Changing Relation?," Working Paper Series 1999:21, Uppsala University, Department of Economics. [Downloadable!]
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  8. Lindh, Thomas & Malmberg, Bo, 1998. "Age structure and inflation - a Wicksellian interpretation of the OECD data," Journal of Economic Behavior & Organization, Elsevier, vol. 36(1), pages 19-37, July. [Downloadable!] (restricted)
  9. Levine, Ross & Renelt, David, 1992. "A Sensitivity Analysis of Cross-Country Growth Regressions," American Economic Review, American Economic Association, vol. 82(4), pages 942-63, September. [Downloadable!] (restricted)
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  10. Horioka, C.Y., 1992. "The Impact of the Age structure of the Population on the Household Saving Rate in Japan : A Cointegration Analysis," Papers 287, Osaka - Institute of Social and Economic Research.
  11. S Durlauf & Danny Quah, 1998. "The New Empirics of Economic Growth," CEP Discussion Papers dp0384, Centre for Economic Performance, LSE.
  12. Bloom, David E & Williamson, Jeffrey G, 1998. "Demographic Transitions and Economic Miracles in Emerging Asia," World Bank Economic Review, Oxford University Press, vol. 12(3), pages 419-55, September.
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  13. repec:att:wimass:1919983 is not listed on IDEAS
  14. Lenehan, A. J., 1996. "The macroeconomic effects of the postwar baby boom: Evidence from Australia," Journal of Macroeconomics, Elsevier, vol. 18(1), pages 155-169. [Downloadable!] (restricted)
  15. Horioka, C.Y., 1989. "The Determinants Of Japan'S Saving Rate: The Impact Of The Age Structure Of The Population And Other Factors," Papers 189, Osaka - Institute of Social and Economic Research.
  16. Brander, James A & Dowrick, Steve, 1994. "The Role of Fertility and Population in Economic Growth: Empirical Results from Aggregate Cross-National Data," Journal of Population Economics, Springer, vol. 7(1), pages 1-25.
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  17. Mankiw, N Gregory & Romer, David & Weil, David N, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, MIT Press, vol. 107(2), pages 407-37, May. [Downloadable!] (restricted)
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  18. Blomquist, N.S. & Wijkander, H., 1993. "Fertility Waves, Aggregate Savings and the Rate of Interest," Papers 1993-9, Uppsala - Working Paper Series.
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  19. Modigliani, Franco, 1986. "Life Cycle, Individual Thrift, and the Wealth of Nations," American Economic Review, American Economic Association, vol. 76(3), pages 297-313, June. [Downloadable!] (restricted)
  20. Lindh, Thomas, 1999. "Medium-Term Forecasts of Potential GDP and Inflation Using Age Structure Information," Working Paper Series 99, Sveriges Riksbank (Central Bank of Sweden). [Downloadable!]
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Lindh, Thomas & Malmberg, Bo, 2002. "Swedish post-war economic development. The role of age structure in a welfare state," Arbetsrapport 2003:4, Institute for Futures Studies. [Downloadable!]
  2. Malmberg, Bo & Lindh, Thomas & Halvarsson, Max, 2005. "Productivity consequences of workforce ageing - Stagnation or a Horndal effect?," Arbetsrapport 2005:17, Institute for Futures Studies. [Downloadable!]
  3. Hofer, Helmut & Url, Thomas, 2005. "Growth Effects of Age-related Productivity Differentials in an Ageing Society. A Simulation Study for Austria," Economics Series 179, Institute for Advanced Studies. [Downloadable!]
  4. K. Navaneetham, 2002. "Age structural transition and economic growth: Evidence from South and Southeast Asia," Centre for Development Studies, Trivendrum Working Papers 337, Centre for Development Studies, Trivendrum, India. [Downloadable!]
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