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Medium-Term Forecasts of Potential GDP and Inflation Using Age Structure Information

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Author Info
Lindh, Thomas () (Department of Economics, Uppsala University)

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Abstract

Economic behavior as well as economic resources of individuals vary with age. Swedish time series show that the age structure of the population contains information correlated to medium-term trends in growth, inflation and other macroeconomic data. GDP gaps estimated by age structure regressions are closely related to conventional measures using filters, time series methods, and structural models. Reliable estimates of potential GDP and other macroeconomic series often become available after (at least) a one-year lag. Monetary policy is believed to affect inflation with a lag of one or two 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.

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Publisher Info
Paper provided by Sveriges Riksbank (Central Bank of Sweden) in its series Working Paper Series with number 99.

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Length: 45 pages
Date of creation: 01 Nov 1999
Date of revision:
Handle: RePEc:hhs:rbnkwp:0099

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Postal: Sveriges Riksbank, SE-103 37 Stockholm, Sweden
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Related research
Keywords: Age structure; Inflation forecasts; Potential GDP;

Other versions of this item:

Find related papers by JEL classification:
E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
J10 - Labor and Demographic Economics - - Demographic Economics - - - General
O52 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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References listed on IDEAS
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.:
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    Other versions:
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    Other versions:
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  8. Jacobson, Tor & Jansson, Per & Vredin, Anders & Warne, Anders, 1999. "A VAR Model for Monetary Policy Analysis in a Small Open Economy," Working Paper Series 77, Sveriges Riksbank (Central Bank of Sweden). [Downloadable!]
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  15. Andersson, Björn, 1998. "Scandinavian Evidence on Growth and Age Structure," Working Paper Series 1998:4, Uppsala University, Department of Economics. [Downloadable!]
  16. 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!]
    Other versions:
  17. 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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    Other versions:
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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. 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. [Downloadable!] (restricted)
  2. Andersson, Andreas & Österholm, Pär, 2001. "The Impact of Demography on the Real Exchange Rate," Working Paper Series 2001:11, Uppsala University, Department of Economics.
  3. Andreas Andersson & Pär Österholm, 2005. "Forecasting real exchange rate trends using age structure data -- the case of Sweden," Applied Economics Letters, Taylor and Francis Journals, vol. 12(5), pages 267-272, April. [Downloadable!] (restricted)
  4. Bruér, Mattias, 2002. "Can Demography Improve Inflation Forecasts? The Case of Sweden," Working Paper Series 2002:4, Uppsala University, Department of Economics. [Downloadable!]
  5. Andreas Andersson & Pär Österholm, 2006. "Population age structure and real exchange rates in the OECD," International Economic Journal, Korean International Economic Association, vol. 20(1), pages 1-18, March. [Downloadable!] (restricted)
  6. Björn Andersson, 2001. "Scandinavian Evidence on Growth and Age Structure," Regional Studies, Taylor and Francis Journals, vol. 35(5), pages 377-390, July. [Downloadable!] (restricted)
  7. Alexia Prskawetz & Thomas Kögel & Warren C. Sanderson & Sergei Scherbov, 2009. "The Effects of Age Structure on Economic Growth: An Application of Probabilistic Forecasting in India," Working Papers 0403, Vienna Institute of Demography (VID) of the Austrian Academy of Sciences in Vienna. [Downloadable!]
  8. 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. [Downloadable!]
  9. Malmberg, Bo & Lindh, Thomas, 2004. "Demographically based global income forecasts up to the year 2050," Arbetsrapport 2004:7, Institute for Futures Studies. [Downloadable!]
    Other versions:
  10. 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. [Downloadable!]
  11. 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. [Downloadable!]
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