IDEAS home Printed from https://ideas.repec.org/p/bbk/bbkefp/1307.html
   My bibliography  Save this paper

Age structure and the current account

Author

Listed:
  • Gudmundur S. Gudmundsson

    (Universitat Pompeu Fabra)

  • Gylfi Zoega

    (Department of Economics, Mathematics & Statistics, Birkbeck
    University of Iceland)

Abstract

We adjust current account surpluses and deficits of 57 countries in the period 2005-2009 for differences in the age structure of their populations and find that these differences can account for a significant part of the variation in the data. Among the large countries we find that the adjustment increases the surpluses of Germany and Japan while the surpluses of China, Singapore, Hong Kong, Korea, Thailand, Indonesia and Malaysia are significantly diminished.

Suggested Citation

  • Gudmundur S. Gudmundsson & Gylfi Zoega, 2013. "Age structure and the current account," Birkbeck Working Papers in Economics and Finance 1307, Birkbeck, Department of Economics, Mathematics & Statistics.
  • Handle: RePEc:bbk:bbkefp:1307
    as

    Download full text from publisher

    File URL: https://eprints.bbk.ac.uk/id/eprint/26865
    File Function: First version, 2013
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Higgins, Matthew, 1998. "Demography, National Savings, and International Capital Flows," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(2), pages 343-369, May.
    2. Adams, Nassau A, 1971. "Dependency Rates and Savings Rates: Comment," American Economic Review, American Economic Association, vol. 61(3), pages 472-475, June.
    3. Paul R. Masson & Ralph W. Tryon, 2019. "Macroeconomic Effects of Projected Population Aging in Industrial Countries," World Scientific Book Chapters, in: Macroeconomic Modelling and Monetary and Exchange Rate Regimes, chapter 2, pages 17-56, World Scientific Publishing Co. Pte. Ltd..
    4. Leff, Nathaniel H, 1969. "Dependency Rates and Savings Rates," American Economic Review, American Economic Association, vol. 59(5), pages 886-896, December.
    5. Lane, Philip R. & Milesi-Ferretti, Gian Maria, 2012. "External adjustment and the global crisis," Journal of International Economics, Elsevier, vol. 88(2), pages 252-265.
    6. Miles, David, 1999. "Modelling the Impact of Demographic Change upon the Economy," Economic Journal, Royal Economic Society, vol. 109(452), pages 1-36, January.
    7. Yunus Aksoy & Tobias Grasl & Ron P Smith, 2012. "The economic impact of demographic structure in OECD countries," Birkbeck Working Papers in Economics and Finance 1212, Birkbeck, Department of Economics, Mathematics & Statistics.
    8. Bloom, David E & Williamson, Jeffrey G, 1998. "Demographic Transitions and Economic Miracles in Emerging Asia," World Bank Economic Review, World Bank Group, vol. 12(3), pages 419-455, September.
    9. Taylor, Alan M & Williamson, Jeffrey G, 1994. "Capital Flows to the New World as an Intergenerational Transfer," Journal of Political Economy, University of Chicago Press, vol. 102(2), pages 348-371, April.
    10. Taylor, Alan M., 1995. "Debt, dependence and the demographic Transition: Latin America in to the next century," World Development, Elsevier, vol. 23(5), pages 869-879, May.
    11. James M. Poterba, 1994. "International Comparisons of Household Saving," NBER Books, National Bureau of Economic Research, Inc, number pote94-1, September.
    12. Graham, John W., 1989. "International differences in saving rates and the life cycle hypothesis : Reply and further evidence," European Economic Review, Elsevier, vol. 33(7), pages 1499-1507, September.
    13. John B. Taylor, 2009. "The Financial Crisis and the Policy Responses: An Empirical Analysis of What Went Wrong," NBER Working Papers 14631, National Bureau of Economic Research, Inc.
    14. Masson, Paul R & Bayoumi, Tamim & Samiei, Hossein, 1998. "International Evidence on the Determinants of Private Saving," World Bank Economic Review, World Bank Group, vol. 12(3), pages 483-501, September.
    15. Herbertsson, Tryggvi Thor & Zoega, Gylfi, 1999. "Trade surpluses and life-cycle saving behaviour," Economics Letters, Elsevier, vol. 65(2), pages 227-237, November.
    16. James M. Poterba, 1994. "Introduction to "International Comparisons of Household Saving"," NBER Chapters, in: International Comparisons of Household Saving, pages 1-10, National Bureau of Economic Research, Inc.
    17. Goldberger, Arthur S, 1973. "Dependency Rates and Savings Rates: Further Comment," American Economic Review, American Economic Association, vol. 63(1), pages 232-233, March.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Jair N. Ojeda-Joya, 2019. "Episodios de deterioro de la cuenta corriente en Colombia: factores externos, cíclicos y estructurales," Borradores de Economia 1061, Banco de la Republica de Colombia.
    2. Aneesha Chitgupi, 2018. "Impact of age structure transition on current account balance for India: An empirical analysis," Working Papers 420, Institute for Social and Economic Change, Bangalore.
    3. Hassan Ghassan & Hassan Al-Hajhoj & Faruk Balli, 2019. "Bi-Demographic Changes and Current Account using SVAR Modeling: Evidence from Saudi Economy," Working Papers hal-01742574, HAL.
    4. Harald Badinger & Aurélien Fichet de Clairfontaine & Wolf Heinrich Reuter, 2017. "Fiscal Rules and Twin Deficits: The Link between Fiscal and External Balances," The World Economy, Wiley Blackwell, vol. 40(1), pages 21-35, January.
    5. Ghassan, Hassan B. & Alhajhoj, Hassan R. & Balli, Faruk, 2020. "Bi-Demographic and Current Account Dynamics using SVAR Model: Evidence from Saudi Arabia," MPRA Paper 109772, University Library of Munich, Germany, revised Jun 2021.
    6. Margarita Katsimi & Gylfi Zoega, 2016. "European Integration and the Feldstein–Horioka Puzzle," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 78(6), pages 834-852, December.
    7. Hassan B. Ghassan & Hassan R. Al-Hajhoj & Faruk Balli, 2018. "Bi-Demographic Changes and Current Account using SVAR Modeling," Papers 1803.11161, arXiv.org, revised Mar 2019.
    8. Ghassan, Hassan & Alhajhoj, Hassan R. & Balli, Faruk, 2018. "Bi-Demographic Changes and Current Account using SVAR Modeling: Evidence from Saudi Arabia," MPRA Paper 93013, University Library of Munich, Germany, revised 01 Feb 2019.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Margarita Katsimi & Gylfi Zoega, 2016. "European Integration and the Feldstein–Horioka Puzzle," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 78(6), pages 834-852, December.
    2. Matthew Higgins & Jeffrey G. Williamson, 1996. "Asian Demography and Foreign Capital Dependence," NBER Working Papers 5560, National Bureau of Economic Research, Inc.
    3. Li, Hongbin & Zhang, Jie & Zhang, Junsen, 2007. "Effects of longevity and dependency rates on saving and growth: Evidence from a panel of cross countries," Journal of Development Economics, Elsevier, vol. 84(1), pages 138-154, September.
    4. Yukio Fukumoto & Tomoko Kinugasa, 2019. "How Different are demographic impacts on trade openness by geographic region?:Findings from Europe,Asia,America,and Africa," Discussion Papers 1912, Graduate School of Economics, Kobe University.
    5. Melanie Lührmann, 2003. "Demographic Change, Foresight and International Capital Flows," MEA discussion paper series 03038, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
    6. Geoffrey Hewings & Seryoung Park, 2007. "Aging and the Regional Economy: Simulation Results from the Chicago CGE Model," EcoMod2007 23900037, EcoMod.
    7. Yukio Fukumoto & Tomoko Kinugasa, 2017. "Age Structure and Trade Openness: An Empirical Investigation," The World Economy, Wiley Blackwell, vol. 40(6), pages 1247-1263, June.
    8. Michele Gragnolati & Ole Hagen Jorgensen & Romero Rocha & Anna Fruttero, 2011. "Growing Old in an Older Brazil : Implications of Population Ageing on Growth, Poverty, Public Finance, and Service Delivery," World Bank Publications, The World Bank, number 2351.
    9. Hassan Ghassan & Hassan Al-Hajhoj & Faruk Balli, 2019. "Bi-Demographic Changes and Current Account using SVAR Modeling: Evidence from Saudi Economy," Working Papers hal-01742574, HAL.
    10. Aneesha Chitgupi, 2018. "Impact of age structure transition on current account balance for India: An empirical analysis," Working Papers 420, Institute for Social and Economic Change, Bangalore.
    11. Gemma Estrada & Donghyun Park & Arief Ramayandi, 2012. "Population aging and aggregate consumption in developing Asia," Chapters, in: Donghyun Park & Sang-Hyop Lee & Andrew Mason (ed.), Aging, Economic Growth, and Old-Age Security in Asia, chapter 4, pages 111-129, Edward Elgar Publishing.
    12. Kieran Mc Morrow & Werner Röger, 2003. "Economic and financial market consequences of ageing populations," European Economy - Economic Papers 2008 - 2015 182, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    13. Lindh, T. & Malmberg, B., 1999. "Age Distributions and the Current Account - A Changing Relation?," Papers 1999:21, Uppsala - Working Paper Series.
    14. Jain, Neha & Goli, Srinivas, 2021. "Demographic Change and Private Savings in India," SocArXiv n73ab, Center for Open Science.
    15. Mathias Hoffmann, 2004. "Saving, investment and the net foreign asset position," Money Macro and Finance (MMF) Research Group Conference 2003 45, Money Macro and Finance Research Group.
    16. Axel Börsch‐Supan & Alexander Ludwig & Joachim Winter, 2006. "Ageing, Pension Reform and Capital Flows: A Multi‐Country Simulation Model," Economica, London School of Economics and Political Science, vol. 73(292), pages 625-658, November.
    17. David E. Bloom & David Canning & Bryan Graham, 2003. "Longevity and Life‐cycle Savings," Scandinavian Journal of Economics, Wiley Blackwell, vol. 105(3), pages 319-338, September.
    18. Österholm, Pär, 2004. "Estimating the Relationship between Age Structure and GDP in the OECD Using Panel Cointegration Methods," Working Paper Series 2004:13, Uppsala University, Department of Economics.
    19. Dramane Coulibaly & Blaise Gnimassoun & Valérie Mignon, 2018. "The tale of two international phenomena: International migration and global imbalances," Working Papers 2018-02, CEPII research center.
    20. Durr-e-Nayab, 2008. "Demographic Dividend or Demographic Threat in Pakistan?," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 47(1), pages 1-26.

    More about this item

    Keywords

    Current account; age structure; life-cycle saving behavior.;
    All these keywords.

    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:bbk:bbkefp:1307. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://www.bbk.ac.uk/departments/ems/ .

    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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: (email available below). General contact details of provider: https://www.bbk.ac.uk/departments/ems/ .

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.