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Population age structure and secular stagnation: Evidence from long run data

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  • Joseph Kopecky Author-1-Name-First: Joseph Author-1-Name-Last: Kopecky

    (Trinity College Dublin)

Abstract

A large literature has reopened the secular stagnation hypothesis, first proposed near the end of the great depression as a warning for anemic growth resulting from long run trends in population aging. In this paper, I explore the relationship between population age structure and growth in: investment, consumption and output, in a long run panel of advanced economies. The evidence is largely consistent with proposed channels for secular stagnation. Investment growth, in its level and as a fraction of GDP, appears much stronger in young populations, while facing demographic headwinds in older economies. Consumption and output growth are positively associated with late career workers, with a negative relationship coming from both young and old dependents. Consistent with the recent secular stagnation literature, interest rate channels appear to have strong interactions with population age structures. I find that for investment and output growth, estimated impacts of age-structure are more pronounced in low interest rate environments, with high rates mitigating some of their effect.

Suggested Citation

  • Joseph Kopecky Author-1-Name-First: Joseph Author-1-Name-Last: Kopecky, 2023. "Population age structure and secular stagnation: Evidence from long run data," Trinity Economics Papers tep0526, Trinity College Dublin, Department of Economics.
    • Handle: RePEc:tcd:tcduee:tep0523
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    More about this item

    Keywords

    Secularstagnation; Demographictransition; populationaging; economicgrowth;
    All these keywords.

    JEL classification:

    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics

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