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The Wealth of Working Nations

Author

Listed:
  • Fernández-Villaverde, Jesús
  • Ventura, Gustavo
  • Yao, Wen

Abstract

Due to population aging, GDP growth per capita and GDP growth per working-age adult have become quite different among many advanced economies over the last several decades. Countries whose GDP growth per capita performance has been lackluster, like Japan, have done surprisingly well in terms of GDP growth per working-age adult. Indeed, from 1998 to 2019, Japan has grown slightly faster than the U.S. in terms of per working-age adult: an accumulated 31.9% vs. 29.5%. Furthermore, many advanced economies appear to be on parallel balanced growth trajectories in terms of working-age adults despite important differences in levels. Motivated by this observation, we calibrate a standard neoclassical growth model in which the growth of the working-age adult population varies in line with the data for each economy. Despite the underlying demographic differences, the calibrated model tracks output per working-age adult in most economies of our sample. Our results imply that the growth behavior of mature, aging economies is not puzzling from a theoretical perspective.

Suggested Citation

  • Fernández-Villaverde, Jesús & Ventura, Gustavo & Yao, Wen, 2023. "The Wealth of Working Nations," CEPR Discussion Papers 18621, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:18621
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    2. Shirota, Toyoichiro & Tsuchida, Satoshi, 2025. "Aggregate implications of changing industrial trends in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 75(C).
    3. Fernández-Villaverde, Jesús & Ventura, Gustavo & Yao, Wen, 2025. "The wealth of working nations," European Economic Review, Elsevier, vol. 173(C).
    4. Delalibera, Bruno R. & Pereira, Luciene & Rios, Heron & Serrano-Quintero, Rafael, 2024. "Capital misallocation and economic development in a dynamic open economy," Journal of Economic Dynamics and Control, Elsevier, vol. 168(C).
    5. Mark Budolfson & Michael Geruso & Kevin J. Kuruc & Dean Spears & Sangita Vyas, 2025. "Is Less Really More? Comparing the Climate and Productivity Impacts of a Shrinking Population," NBER Working Papers 33932, National Bureau of Economic Research, Inc.
    6. Selahattin Imrohoroglu, 2025. "Aging, Population Projections, and Public Pensions," CIGS Working Paper Series 25-018E, The Canon Institute for Global Studies.
    7. Konysev, Vasilij & Fehrle, Daniel, 2025. "To converge or not to converge: Accounting for the German reunification," VfS Annual Conference 2025 (Cologne): Revival of Industrial Policy 325462, Verein für Socialpolitik / German Economic Association.
    8. YiLi Chien & Wenxin Du & Hanno Lustig, 2025. "Japan’s Debt Puzzle: Sovereign Wealth Fund from Borrowed Money," Working Papers 2025-023, Federal Reserve Bank of St. Louis.
    9. Ryoji Ohdoi, 2025. "International asymmetries in population aging and their consequences for the technology gap and global growth," Discussion Paper Series 302, School of Economics, Kwansei Gakuin University.
    10. Ana Beatriz, 2025. "Effect of Central Bank Interest Rates on Economic Growth in Brazil," International Journal of Economic Policy, CARI Journals Limited, vol. 5(6), pages 52-60.

    More about this item

    Keywords

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    JEL classification:

    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General

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