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Secular Stagnation? The Effect of Aging on Economic Growth in the Age of Automation

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  • Daron Acemoglu
  • Pascual Restrepo

Abstract

Several recent theories emphasize the negative effects of an aging population on economic growth, either because of the lower labor force participation and productivity of older workers or because aging will create an excess of savings over desired investment, leading to secular stagnation. We show that there is no such negative relationship in the data. If anything, countries experiencing more rapid aging have grown more in recent decades. We suggest that this counterintuitive finding might reflect the more rapid adoption of automation technologies in countries undergoing more pronounced demographic changes, and provide evidence and theoretical underpinnings for this argument.

Suggested Citation

  • Daron Acemoglu & Pascual Restrepo, 2017. "Secular Stagnation? The Effect of Aging on Economic Growth in the Age of Automation," NBER Working Papers 23077, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:23077
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    References listed on IDEAS

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    1. Nicole Maestas & Kathleen Mullen & David Powell, 2014. "The Effect of Population Aging on Economic Growth," Discussion Papers 14-012, Stanford Institute for Economic Policy Research.
    2. Robert J. Gordon, 2016. "Perspectives on The Rise and Fall of American Growth," American Economic Review, American Economic Association, vol. 106(5), pages 72-76, May.
    3. Thomas Lindh & Bo Malmberg, 1999. "Age structure effects and growth in the OECD, 1950-1990," Journal of Population Economics, Springer;European Society for Population Economics, vol. 12(3), pages 431-449.
    4. Nicole Maestas & Kathleen J. Mullen & David Powell, 2016. "The Effect of Population Aging on Economic Growth, the Labor Force and Productivity," Working Papers WR-1063-1, RAND Corporation.
    5. James Feyrer, 2007. "Demographics and Productivity," The Review of Economics and Statistics, MIT Press, vol. 89(1), pages 100-109, February.
    6. Nicole Maestas & Kathleen J. Mullen & David Powell, 2016. "The Effect of Population Aging on Economic Growth, the Labor Force and Productivity," NBER Working Papers 22452, National Bureau of Economic Research, Inc.
    7. Daron Acemoglu & Pascual Restrepo, 2016. "The Race Between Machine and Man: Implications of Technology for Growth, Factor Shares and Employment," NBER Working Papers 22252, National Bureau of Economic Research, Inc.
    8. Nicole Maestas & Kathleen J. Mullen & David Powell, 2016. "The Effect of Population Aging on Economic Growth, the Labor Force and Productivity," NBER Working Papers 22452, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Carmen Herrero Blanco & Ricardo Martínez & Antonio Villar Notario, 2017. "Population Structure and the Human Development Index," Working Papers. Serie AD 2017-04, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    2. Frank T. Denton & Byron G. Spencer, 2017. "What Rates Of Productivity Growth Would Be Required To Offset The Effects Of Population Aging? A Study Of Twenty Industrialised Countries," Department of Economics Working Papers 2017-08, McMaster University.
    3. Baldanzi, Annarita & Prettner, Klaus & Tscheuschner, Paul, 2017. "Longevity-induced vertical innovation and the tradeoff between life and growth," Hohenheim Discussion Papers in Business, Economics and Social Sciences 31-2017, University of Hohenheim, Faculty of Business, Economics and Social Sciences.
    4. Dauth, Wolfgang & Findeisen, Sebastian & S�dekum, Jens & Woessner, Nicole, 2017. "German Robots - The Impact of Industrial Robots on Workers," CEPR Discussion Papers 12306, C.E.P.R. Discussion Papers.
    5. repec:eee:jhouse:v:38:y:2017:i:c:p:38-49 is not listed on IDEAS
    6. Edle von Gaessler, Anne & Ziesemer, Thomas, 2017. "Ageing, human capital and demographic dividends with endogenous growth, labour supply and foreign capital," MERIT Working Papers 043, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    7. Casper Worm Hansen & Holger Strulik, 2017. "Life expectancy and education: evidence from the cardiovascular revolution," Journal of Economic Growth, Springer, vol. 22(4), pages 421-450, December.
    8. Frank T. Denton & Byron G. Spencer, 2018. "The Differential Effects of Population Aging on Provincial GDP per capita and the Role of Productivity Growth as a Possible offset," Department of Economics Working Papers 2018-04, McMaster University.

    More about this item

    JEL classification:

    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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