IDEAS home Printed from https://ideas.repec.org/a/aea/aerins/v1y2019i3p325-42.html
   My bibliography  Save this article

Aging, Output Per Capita, and Secular Stagnation

Author

Listed:
  • Gauti B. Eggertsson
  • Manuel Lancastre
  • Lawrence H. Summers

Abstract

This paper re-examines the relationship between population aging and economic growth. We confirm previous research such as Cutler et al. (1990) and Acemoglu and Restrepo (2017) that show positive correlation between population aging and per capita output growth. Our contribution is demonstrating that this relationship breaks down when the adjustment of interest rates is inhibited by a lower bound on nominal rates, as during the Great Financial Crisis decade. Indeed, during the "secular stagnation regime" of 2008–2015 that prevailed in a number of countries, aging had a negative impact on living standards, consistent with the secular stagnation hypothesis.

Suggested Citation

  • Gauti B. Eggertsson & Manuel Lancastre & Lawrence H. Summers, 2019. "Aging, Output Per Capita, and Secular Stagnation," American Economic Review: Insights, American Economic Association, vol. 1(3), pages 325-342, December.
    • Handle: RePEc:aea:aerins:v:1:y:2019:i:3:p:325-42
    Note: DOI: 10.1257/aeri.20180383
    as

    Download full text from publisher

    File URL: https://www.aeaweb.org/doi/10.1257/aeri.20180383
    Download Restriction: no
    File URL: https://www.aeaweb.org/doi/10.1257/aeri.20180383.data
    Download Restriction: no
    File URL: https://www.aeaweb.org/doi/10.1257/aeri.20180383.appx
    Download Restriction: no
    File URL: https://www.aeaweb.org/doi/10.1257/aeri.20180383.ds
    Download Restriction: Access to full text is restricted to AEA members and institutional subscribers.
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Juan F. Jimeno, 2019. "Fewer babies and more robots: economic growth in a new era of demographic and technological changes," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 10(2), pages 93-114, June.
    2. Joseph Kopecky & Alan M. Taylor, 2020. "The Murder-Suicide of the Rentier: Population Aging and the Risk Premium," NBER Working Papers 26943, National Bureau of Economic Research, Inc.
    3. Allen, Steven G., 2023. "Demand for older workers: What do we know? What do we need to learn?," The Journal of the Economics of Ageing, Elsevier, vol. 24(C).
    4. Michael Kuhn & Klaus Prettner, 2023. "Rising Longevity, Increasing the Retirement Age, and the Consequences for Knowledge‐based Long‐run Growth," Economica, London School of Economics and Political Science, vol. 90(357), pages 39-64, January.
    5. 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.
    6. Dantas Guimarães, Silvana & Ferreira Tiryaki, Gisele, 2020. "The impact of population aging on business cycles volatility: International evidence," The Journal of the Economics of Ageing, Elsevier, vol. 17(C).
    7. José Alves & Sandro Morgado, 2022. "Secular Stagnation: Is Immigration Part of the Solution?," CESifo Working Paper Series 9561, CESifo.
    8. Sweder van Wijnbergen, 2018. "Real interest rates, exchange rates and the ZLB: on Secular Stagnation," Tinbergen Institute Discussion Papers 18-032/VI, Tinbergen Institute, revised 28 Oct 2018.
    9. Wee Chian Koh & Shu Yu, 2021. "A Decade After the 2009 Global Recession: Macroeconomic Developments," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 12(02), pages 1-24, June.
    10. Lee, Hyun-Hoon & Shin, Kwanho, 2019. "Nonlinear effects of population aging on economic growth," Japan and the World Economy, Elsevier, vol. 51(C), pages 1-1.
    11. Alexiou, Constantinos & Trachanas, Emmanouil, 2020. "Predicting post-war US recessions: A probit modelling approach," Structural Change and Economic Dynamics, Elsevier, vol. 54(C), pages 210-219.
    12. Margarita Rubio & Fang Yao, 2020. "Macroprudential Policies in a Low Interest Rate Environment," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 52(6), pages 1565-1591, September.
    13. Fukuda, Shin-ichi & Okumura, Koki, 2021. "The aging society, savings rates, and regional flow of funds in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 62(C).
    14. Hellwagner, Timon & Weber, Enzo, 2021. "Labour Market Adjustments to Population Decline," VfS Annual Conference 2021 (Virtual Conference): Climate Economics 242455, Verein für Socialpolitik / German Economic Association.
    15. Kopecky, Joseph, 2023. "Population age structure and secular stagnation: Evidence from long run data," The Journal of the Economics of Ageing, Elsevier, vol. 24(C).
    16. Steven G. Allen, 2019. "Demand for Older Workers: What Do Economists Think? What Are Firms Doing?," NBER Working Papers 26597, National Bureau of Economic Research, Inc.
    17. Takahashi, Yuta & Takayama, Naoki, 2022. "Hidden Stagflation," Discussion Paper Series 733, Institute of Economic Research, Hitotsubashi University.
    18. Katarzyna Maj-Waśniowska & Tomasz Jedynak, 2020. "The Issues and Challenges of Local Government Units in the Era of Population Ageing," Administrative Sciences, MDPI, vol. 10(2), pages 1-23, June.
    19. Giovanna Ciaffi & Matteo Deleidi & Stefano Di Bucchianico, 2022. "Stagnation despite ongoing innovation: Is R&D expenditure composition a missing link? An empirical analysis for the US (1948-2019)," Department of Economics University of Siena 877, Department of Economics, University of Siena.
    20. Goryunov Eugeny, 2021. "Long-term Challenges for the Monetary Policy in Russia: Climate Change, Demographics and Digital Rouble Adoption [Долгосрочные Вызовы Для Российской Монетарной Политики: Климатические Изменения, Де," Russian Economic Development, Gaidar Institute for Economic Policy, issue 11, pages 9-13, November.
    21. Goryunov Eugeny, 2021. "Долгосрочные Вызовы Для Российской Монетарной Политики: Климатические Изменения, Демография И Введение Цифрового Рубля," Russian Economic Development (in Russian), Gaidar Institute for Economic Policy, issue 11, pages 9-13, November.
    22. Guillermo Ordoñez & Facundo Piguillem, 2020. "Savings and Saving Rates: Up or Down?," NBER Working Papers 27179, National Bureau of Economic Research, Inc.
    23. Atif Mian & Ludwig Straub & Amir Sufi, 2021. "What explains the decline in r ∗ ? Rising income inequality versus demographic shifts," Working Papers 2021-12, Princeton University. Economics Department..
    24. Samuel Brien, 2021. "Wealth Inequality, Uninsurable Entrepreneurial Risk and Firms Markup," Working Paper 1476, Economics Department, Queen's University.
    25. Piotr F. Borowski, 2021. "Significance and Directions of Energy Development in African Countries," Energies, MDPI, vol. 14(15), pages 1-19, July.

    More about this item

    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • G01 - Financial Economics - - General - - - Financial Crises
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:aerins:v:1:y:2019:i:3:p:325-42. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael P. Albert (email available below). General contact details of provider: https://edirc.repec.org/data/aeaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.