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The Determinants of the Macroeconomic Implications of Aging

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  • Louise Sheiner

Abstract

The aging of the US population undoubtedly will be associated with macroeconomic changes. In particular, some combination of lower consumption growth and increased labor input will ultimately be required. But, the timing of these changes can have important effects on variables like the rate of return to capital and wages. If the adjustment to consumption is slow, which would be the case if budget deficits were allowed to rise significantly as the population ages, then aging is likely to be associated with an increase in the return to capital and a reduction in wages.

Suggested Citation

  • Louise Sheiner, 2014. "The Determinants of the Macroeconomic Implications of Aging," American Economic Review, American Economic Association, vol. 104(5), pages 218-223, May.
  • Handle: RePEc:aea:aecrev:v:104:y:2014:i:5:p:218-23
    Note: DOI: 10.1257/aer.104.5.218
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    References listed on IDEAS

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    1. Congressional Budget Office, 2013. "The 2013 Long-Term Budget Outlook," Reports 44521, Congressional Budget Office.
    2. Congressional Budget Office, 2013. "The 2013 Long-Term Budget Outlook," Reports 44521, Congressional Budget Office.
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    Cited by:

    1. Nicole Maestas & Kathleen J. Mullen & David Powell, 2016. "The Effect of Population Aging on Economic Growth, the Labor Force and Productivity," NBER Working Papers 22452, National Bureau of Economic Research, Inc.
    2. Nicole Maestas & Kathleen J. Mullen & David Powell, 2016. "The Effect of Population Aging on Economic Growth, the Labor Force and Productivity," Working Papers WR-1063-1, RAND Corporation.

    More about this item

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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