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Demographic Change in Asia: the Impact on Optimal National Saving, Investment and the Current Account

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  • Guest, R.S.
  • McDonald, I.M.

Abstract

By simulating a model of the optimal level of saving in a small open economy, this paper calculates the levels of optimal national saving, investment and the current account balance for five Asian countries, Hong Kong, Japan, Singapore, Malaysia and Philippines, for the period from 1997 to 2050. The calculations focus on the implications of making allowance for the changing demographic structure of the population on employment participation, labour productivity and consumption demands. The simulations show that variations in prospective demographic change across countries cause considerable variations in the patterns of their optimal rates of national saving, reinforcing the idea that evaluations of a country's performance on saving should take account of the prospective demographic structure of its population.

Suggested Citation

  • Guest, R.S. & McDonald, I.M., 1999. "Demographic Change in Asia: the Impact on Optimal National Saving, Investment and the Current Account," Department of Economics - Working Papers Series 726, The University of Melbourne.
  • Handle: RePEc:mlb:wpaper:726
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    References listed on IDEAS

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    1. Nelson, Daniel B, 1991. "Conditional Heteroskedasticity in Asset Returns: A New Approach," Econometrica, Econometric Society, vol. 59(2), pages 347-370, March.
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    3. Glosten, Lawrence R & Jagannathan, Ravi & Runkle, David E, 1993. " On the Relation between the Expected Value and the Volatility of the Nominal Excess Return on Stocks," Journal of Finance, American Finance Association, vol. 48(5), pages 1779-1801, December.
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    Cited by:

    1. John Janssen, 2002. "Long-term fiscal projections and their relationship with the intertemporal budget constraint: An application to New Zealand," Treasury Working Paper Series 02/05, New Zealand Treasury.
    2. Young Jun Chun, 2007. "Population Aging, Fiscal Policies, and National Saving: Predictions for the Korean Economy," NBER Chapters,in: Fiscal Policy and Management in East Asia, NBER-EASE, Volume 16, pages 339-372 National Bureau of Economic Research, Inc.
    3. Jong-Won Yoon & Jinill Kim & Jungjin Lee, 2014. "Impact of Demographic Changes on Inflation and the Macroeconomy," IMF Working Papers 14/210, International Monetary Fund.
    4. Laurence J. Kotlikoff, 2007. "Comment on "Population Aging, Fiscal Policies, and National Saving: Predictions for the Korean Economy"," NBER Chapters,in: Fiscal Policy and Management in East Asia, NBER-EASE, Volume 16, pages 372-373 National Bureau of Economic Research, Inc.
    5. Young Jun Chun, 2006. "Population Aging, Fiscal Policies, and National Saving: Predictions for Korean Economy," NBER Working Papers 12265, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    DEMOGRAPHY ; ASIA ; INVESTMENTS ; INTERNATIONAL ECONOMY;

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements

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