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Economic Consequences Of Population Aging In Japan: Effects Through Changes In Demand Structure

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  • MITSURU KATAGIRI

    (Hosei University, 2 Chome-17-1 Fujimi, Chiyoda City, Tokyo 102-8160, Japan)

Abstract

In this paper, I investigate the effects of changes in demand structure caused by population aging on the Japanese economy using a multi-sector new Keynesian model with job creation/destruction analysis. I consider upward revisions in forecast for the speed of Japanese population aging as unexpected shocks to its demand structure. I find that the shocks caused around 0.3% point deflationary pressure on year-to-year inflation, 0.3% to 0.4% point increase in unemployment rates, and 1.8% point decrease in real GDP from the early 1990s to the 2000s in Japan. I also find that the repetition of such upward revisions made those effects look more persistent.

Suggested Citation

  • Mitsuru Katagiri, 2021. "Economic Consequences Of Population Aging In Japan: Effects Through Changes In Demand Structure," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 66(06), pages 1709-1731, December.
    • Handle: RePEc:wsi:serxxx:v:66:y:2021:i:06:n:s0217590818420067
    DOI: 10.1142/S0217590818420067
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