The Impact of Population Ageing on the Czech Economy
AbstractThe Czech Republic is facing a population ageing phenomenon. In addition, its demographic structure is expected to change dramatically over the next 50 years. We apply a stylised overlapping generation model in order to analyse the potential effects of the expected demographic changes on aggregate economic performance taking into account alternative fiscal policy set-ups. We provide a rough estimate of the amendments necessary on the revenue and expenditure sides in order to keep the current system financially balanced. We also discuss the implications for the development of other economic variables. In particular, we separately simulate future developments in the cases of adjustment in either the contribution rate or the value of public benefit. In addition, we demonstrate that parametric changes, such as an increase in the statutory retirement age, cannot eliminate the impact of the deterioration in the demographic structure on the course of the economy.
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Bibliographic InfoPaper provided by Czech National Bank, Research Department in its series Working Papers with number 2009/1.
Date of creation: Sep 2009
Date of revision:
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Population ageing; public pension systems; social security.;
Find related papers by JEL classification:
- E27 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
- J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
This paper has been announced in the following NEP Reports:
- NEP-AGE-2009-11-07 (Economics of Ageing)
- NEP-ALL-2009-11-07 (All new papers)
- NEP-DGE-2009-11-07 (Dynamic General Equilibrium)
- NEP-MAC-2009-11-07 (Macroeconomics)
- NEP-TRA-2009-11-07 (Transition Economics)
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