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The Global Impact of Demographic Change

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Author Info

  • Tim Callen
  • Warwick J. McKibbin
  • Nicoletta Batini

Abstract

The world is in the midst of a major demographic transition. This paper examines the implications of such transition over the next 80 years for Japan, the United States, other industrial countries, and the developing regions of the world using a dynamic intertemporal general equilibrium four-country model containing demographics calibrated to the 'medium variant' of the United Nations population projections. We find that population aging in industrial countries will reduce aggregate growth in these regions over time, but should boost growth in developing countries over the next 20-30 years, as the relative size of their workingage populations increases. Demographic change will also affect saving, investment, and capital flows, implying changes in global trade balances and asset prices. We also explore the sensitivity of the results to assumptions about future productivity growth and country external risk for the developing country region.

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Bibliographic Info

Paper provided by International Monetary Fund in its series IMF Working Papers with number 06/9.

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Length: 21
Date of creation: 01 Jan 2006
Date of revision:
Handle: RePEc:imf:imfwpa:06/9

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Related research

Keywords: Capital flows; Aging; Savings; Economic models;

This paper has been announced in the following NEP Reports:

References

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Citations

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Cited by:
  1. Rod Tyers & Jane Golley, 2006. "China's Growth to 2030: The Roles of Demographic Change and Investment Premia," PGDA Working Papers 1206, Program on the Global Demography of Aging.
  2. Rod Tyers & Qun Shi, 2006. "Demographic Change and Policy Responses: Implications for the Global Economy," ANU Working Papers in Economics and Econometrics 2006-469, Australian National University, College of Business and Economics, School of Economics.
  3. Nicoletta Batini & Alessandro Rebucci & Papa M'B. P. N'Diaye, 2005. "The Domestic and Global Impact of Japan's Policies for Growth," IMF Working Papers 05/209, International Monetary Fund.
  4. L. Randall Wray, 2006. "Global Demographic Trends and Provisioning for the Future," Economics Working Paper Archive wp_468, Levy Economics Institute, The.
  5. Robert Dekle, 2004. "Financing Consumption in an Aging Japan: The Role of Foreign Capital Inflows in Immigration," NBER Working Papers 10781, National Bureau of Economic Research, Inc.
  6. Ramon Moreno & Marjorie Santos, 2008. "Pension systems in EMEs: implications for capital flows and financial markets," BIS Papers chapters, in: Bank for International Settlements (ed.), Financial globalisation and emerging market capital flows, volume 44, pages 45-69 Bank for International Settlements.
  7. Dirk Nabers, 2008. "China, Japan and the Quest for Leadership in East Asia," GIGA Working Paper Series 67, GIGA German Institute of Global and Area Studies.
  8. Ross Guest & Grant Scobie & John Bryant, 2003. "Population Ageing in New Zealand: The Impact on Living Standards and the Optimal Rate of Saving with a Flexible Real Exchange Rate," Treasury Working Paper Series 03/34, New Zealand Treasury.
  9. Ferro, Gustavo, 2008. "Un impulso al mercado de rentas vitalicias en España
    [Promoting the annuities market in Spain]    ," MPRA Paper 20211, University Library of Munich, Germany, revised Jul 2008.
  10. Ferro, Gustavo, 2008. "On annuities: an overview of the issues," MPRA Paper 20209, University Library of Munich, Germany, revised Oct 2009.
  11. Geys, Benny & Heinemann, Friedrich & Kalb, Alexander, 2008. "Local governments in the wake of demographic change: evidence from German municipalities," Discussion Papers, Research Unit: Market Processes and Governance SP II 2008-19, Social Science Research Center Berlin (WZB).
  12. Michael Hofmann & Gerhard Kempkes & Helmut Seitz, 2008. "Demographic Change and Public Sector Budgets in a Federal System," CESifo Working Paper Series 2317, CESifo Group Munich.
  13. Elod Takats, 2010. "Ageing and asset prices," BIS Working Papers 318, Bank for International Settlements.
  14. Rod Tyers & Qun Shi, 2006. "Global Demographic Change, Labour Force Growth and Economic Performance," ANU Working Papers in Economics and Econometrics 2006-462, Australian National University, College of Business and Economics, School of Economics.
  15. Miret Padovani & Paolo Vanini, 2010. "An intergenerational cross-country swap," Journal of Risk Finance, Emerald Group Publishing, vol. 11(5), pages 446-463, November.
  16. Geys, Benny & Heinemann, Friedrich & Kalb, Alexander, 2007. "Local Governments in the Wake of Demographic Change: Efficiency and Economies of Scale in German Municipalities," ZEW Discussion Papers 07-036, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  17. Qun Shi & Rod Tyers, 2005. "Global Demographic Change and Economic Performance Applications of an Augmented GTAP-Dynamic," ANU Working Papers in Economics and Econometrics 2005-450, Australian National University, College of Business and Economics, School of Economics.
  18. Rod Tyers & Jane Golley, 2006. "China's Growth to 2030: The Roles of Demographic Change and Investment Risk," ANU Working Papers in Economics and Econometrics 2006-461, Australian National University, College of Business and Economics, School of Economics.
  19. Kim, Soyoung & Lee, Jong-Wha, 2008. "Demographic changes, saving, and current account: An analysis based on a panel VAR model," Japan and the World Economy, Elsevier, vol. 20(2), pages 236-256, March.
  20. Victoria Ann SEITZ & Olesia LUPU & Nabil RAZZOUK & Ka Man Carman CHU, 2009. "Print Advertising In The Us And Hong Kong: A Comparative Analysis," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 4, pages 125-148, November.

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