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Aging, Fertility and Macroeconomic Dynamics

Author

Listed:
  • Aurelien Eyquem

    (University of Lausanne, CH)

  • Masashige Hamano

    (Waseda university, Tokyo, JP and Université du Luxembourg (Extramural Research Fellow))

Abstract

A tractable model with heterogeneous households is proposed to analyze the two-way interactions between demographic and macroeconomic variables. Total population and labor-market participation are both endogenous and affected by economic as well as demographic factors. We perform a quantitative exercise focusing on trend dynamics based on Japanese data. Our counterfactual analysis reveals the role of labor-market participation costs, sunk costs of raising newborns, and technology progress.

Suggested Citation

  • Aurelien Eyquem & Masashige Hamano, 2025. "Aging, Fertility and Macroeconomic Dynamics," DEM Discussion Paper Series 25-06, Department of Economics at the University of Luxembourg.
    • Handle: RePEc:luc:wpaper:25-06
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    File URL: https://www.uni.lu/wp-content/uploads/sites/3/2025/03/DP2025-06-aging-fertility-and-macroeconomic-dynamics.pdf
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    References listed on IDEAS

    as
    1. Kotschy, Rainer & Bloom, David E., 2023. "Population Aging and Economic Growth: From Demographic Dividend to Demographic Drag?," IZA Discussion Papers 16377, Institute of Labor Economics (IZA).
    2. Katagiri, Mitsuru & Konishi, Hideki & Ueda, Kozo, 2020. "Aging and deflation from a fiscal perspective," Journal of Monetary Economics, Elsevier, vol. 111(C), pages 1-15.
    3. Sagiri Kitao & Tomoaki Yamada, 2019. "Dimensions of Inequality in Japan: Distributions of Earnings, Income and Wealth between 1984 and 2014," CAMA Working Papers 2019-36, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    4. McGrattan, Ellen R. & Prescott, Edward C., 2018. "An aggregate model for policy analysis with demographic change," The Journal of the Economics of Ageing, Elsevier, vol. 11(C), pages 52-61.
    5. Nishiyama, Shinichi, 2015. "Fiscal policy effects in a heterogeneous-agent OLG economy with an aging population," Journal of Economic Dynamics and Control, Elsevier, vol. 61(C), pages 114-132.
    Full references (including those not matched with items on IDEAS)

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    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)
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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