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International asymmetries in population aging and their consequences for the technology gap and global growth

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  • Ryoji Ohdoi

    (School of Economics, Kwansei Gakuin University)

Abstract

This paper studies how international asymmetries in population aging shape cross-country technology gaps and global growth. I develop a two-country, two-sector overlapping-generations model with endogenous technological progress free from scale effects. The analysis shows that, in the long-run equilibrium, the faster-aging country's relative technology declines through two mechanisms: reduced per capita labor supply and a reallocation of employment toward the non-tradable sector. Consequently, policies aimed solely at increasing labor-force participation are insufficient to prevent such relative technological decline, because the latter mechanism persists. Numerical simulations confirm these mechanisms and reveal potentially non-monotonic effects on global growth under large demographic asymmetries. I also quantify Japan's relative technological decline due solely to differential aging by calibrating the two countries to Japan and the United States.

Suggested Citation

  • 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.
    • Handle: RePEc:kgu:wpaper:302
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    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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