IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/129084.html

Demographic Trends, International Migration, And External Imbalances: A Regional Analysis

Author

Listed:
  • Wabenga, James Yango
  • Moran, Kevin

Abstract

This paper presents an empirical analysis of the impacts of global demographic changes and international migration on external balances. It categorizes countries into advanced, emerging, and developing economies and conducts the analysis region by region. The results are obtained from panel models that estimate the impact of demographic trends on macroeconomic aggregates. This analysis is conducted region by region, examining one demographic factor (such as aging, fertility, life expectancy, or immigration) and one macroeconomic aggregate (consumption, savings, investment, trade balance, or current account balance) at a time. The results notably report that larger proportions of older adults have a detrimental effect on the trade balance in advanced and merging economies. Additionally, aging in emerging and developing economies is associated with lower savings rates and current account balance to GDP ratio, while in advanced economies, savings rates tend to rise with life expectancy, aging, and net migration. The results suggest that the trade balance is positively associated with the change in the working-age population share in advanced economies, while it is mostly negatively associated with the trade balance in emerging economies. Changes in life expectancy have a negative impact on the trade balance in both advanced and emerging economies. Finally, net immigration increases saving rates in advanced economies and investment in emerging and developing economies. This paper highlights the importance of regional conditioning when examining how demographic trends affect economic decisions, consumption, investment, labour markets, external balances, and public policy. Regional analyses of the effects of demographic changes on the macroeconomy are essential. Although all regions face demographic changes, their scale varies. Therefore, this paper examines the impact of demographic factors on the macroeconomic performance of each region.

Suggested Citation

  • Wabenga, James Yango & Moran, Kevin, 2024. "Demographic Trends, International Migration, And External Imbalances: A Regional Analysis," MPRA Paper 129084, University Library of Munich, Germany, revised Mar 2025.
    • Handle: RePEc:pra:mprapa:129084
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/129084/1/MPRA_paper_129084.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Higgins, Matthew, 1998. "Demography, National Savings, and International Capital Flows," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(2), pages 343-369, May.
    2. Engel, Charles & Rogers, John H., 2006. "The U.S. current account deficit and the expected share of world output," Journal of Monetary Economics, Elsevier, vol. 53(5), pages 1063-1093, July.
    3. Chadwick C. Curtis & Steven Lugauer & Nelson C. Mark, 2015. "Demographic Patterns and Household Saving in China," American Economic Journal: Macroeconomics, American Economic Association, vol. 7(2), pages 58-94, April.
    4. Yunus Aksoy & Henrique S. Basso & Ron P. Smith & Tobias Grasl, 2019. "Demographic Structure and Macroeconomic Trends," American Economic Journal: Macroeconomics, American Economic Association, vol. 11(1), pages 193-222, January.
    5. David E. Bloom & David Canning & Günther Fink, 2010. "Implications of population ageing for economic growth," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 26(4), pages 583-612, Winter.
    6. Charles Engel & John H. Rogers, 2006. "The U.S. current account deficit and the expected share of world output," Proceedings, Federal Reserve Bank of San Francisco, issue jun.
    7. Daron Acemoglu & Pascual Restrepo, 2017. "Secular Stagnation? The Effect of Aging on Economic Growth in the Age of Automation," American Economic Review, American Economic Association, vol. 107(5), pages 174-179, May.
    8. Noëmie Lisack & Rana Sajedi & Gregory Thwaites, 2021. "Population Aging and the Macroeconomy," International Journal of Central Banking, International Journal of Central Banking, vol. 17(2), pages 43-80, June.
    9. Antonio Francesco Gravina & Matteo Lanzafame, 2024. "Demography, Growth, and Robots in Advanced and Emerging Economies," Asian Development Review (ADR), World Scientific Publishing Co. Pte. Ltd., vol. 41(02), pages 31-56, September.
    10. Papapetrou, Evangelia & Tsalaporta, Pinelopi, 2020. "The impact of population aging in rich countries: What’s the future?," Journal of Policy Modeling, Elsevier, vol. 42(1), pages 77-95.
    11. Basso, Henrique S. & Jimeno, Juan F., 2021. "From secular stagnation to robocalypse? Implications of demographic and technological changes," Journal of Monetary Economics, Elsevier, vol. 117(C), pages 833-847.
    12. Curtis, Chadwick C. & Lugauer, Steven & Mark, Nelson C., 2017. "Demographics and aggregate household saving in Japan, China, and India," Journal of Macroeconomics, Elsevier, vol. 51(C), pages 175-191.
    13. Sposi, Michael, 2022. "Demographics and the evolution of global imbalances," Journal of Monetary Economics, Elsevier, vol. 126(C), pages 1-14.
    14. Bhupal Singh, 2019. "Demographic transition and asset prices: Evidence from developing countries," International Finance, Wiley Blackwell, vol. 22(1), pages 53-69, May.
    15. Martin Feldstein, 2008. "Resolving the Global Imbalance: The Dollar and the U.S. Saving Rate," Journal of Economic Perspectives, American Economic Association, vol. 22(3), pages 113-125, Summer.
    16. David Domeij & Martin Flodén, 2006. "Population Aging And International Capital Flows," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 47(3), pages 1013-1032, August.
    17. Rafael Gómez & Pablo Hernández de Cos, 2008. "The importance of being mature: the effect of demographic maturation on global per capita GDP," Journal of Population Economics, Springer;European Society for Population Economics, vol. 21(3), pages 589-608, July.
    18. Noëmie LISACK & Rana SAJEDI & Gregory THWAITES, 2019. "Population ageing: how does it impact the macroeconomy? [Les impacts macroéconomiques du vieillissement de la population]," Bulletin de la Banque de France, Banque de France, issue 223.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Davis, Colin & Hashimoto, Ken-ichi & Tabata, Ken, 2022. "Demographic structure, knowledge diffusion, and endogenous productivity growth," Journal of Macroeconomics, Elsevier, vol. 71(C).
    2. Kopecky, Joseph, 2023. "Population age structure and secular stagnation: Evidence from long run data," The Journal of the Economics of Ageing, Elsevier, vol. 24(C).
    3. Joyce Hsieh, 2023. "Population aging and wealth inequality," Economic Change and Restructuring, Springer, vol. 56(6), pages 4223-4252, December.
    4. Auclert, Adrien & Malmberg, Hannes & Martenet, Frederic & Rognlie, Matthew, 2021. "Demographics, Wealth, and Global Imbalances in the Twenty-First Century," CEPR Discussion Papers 16470, Centre for Economic Policy Research.
    5. Arthur JACOBS & Freddy HEYLEN, 2025. "Demographic change, secular stagnation, and inequality: automation as a blessing?," JODE - Journal of Demographic Economics, Cambridge University Press, vol. 91(4), pages 508-548, December.
    6. Emerson, Patrick & Knabb, Shawn & Sirbu, Anca-Ioana, 2024. "Does the old-age dependency ratio place a drag on secular growth?," Economic Analysis and Policy, Elsevier, vol. 82(C), pages 1056-1070.
    7. Thomas Ziesemer & Anne von Gässler, 2021. "Ageing, human capital and demographic dividends with endogenous growth, labour supply and foreign capital," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 20(2), pages 129-160, May.
    8. Joseph Kopecky Author-1-Name-First: Joseph Author-1-Name-Last: Kopecky, 2023. "Population age structure and secular stagnation: Evidence from long run data," Trinity Economics Papers tep0526, Trinity College Dublin, Department of Economics.
    9. Park, Cyn-Young & Shin, Kwanho & Kikkawa, Aiko, 2022. "Demographic change, technological advance, and growth: A cross-country analysis," Economic Modelling, Elsevier, vol. 108(C).
    10. Andrea Papetti, 2021. "Population aging, relative prices and capital flows across the globe," Temi di discussione (Economic working papers) 1333, Bank of Italy, Economic Research and International Relations Area.
    11. Hua Chai & Mr. Jun I Kim, 2018. "Demographics, Pension Systems and the Saving-Investment Balance," IMF Working Papers 2018/265, International Monetary Fund.
    12. Zsofia Barany & Nicolas Coeurdacier & Stéphane Guibaud, 2015. "Fertility, Longevity and International Capital Flows," Working Papers hal-01164462, HAL.
    13. Mathilde Esposito, 2024. "Workforce Aging and Potential Output Growth," Working Papers hal-04747557, HAL.
    14. Siyan Chen & Saul Desiderio, 2023. "An agent-based framework for the analysis of the macroeconomic effects of population aging," Journal of Evolutionary Economics, Springer, vol. 33(2), pages 393-427, April.
    15. Goh, Soo Khoon & McNown, Robert & Wong, Koi Nyen, 2020. "Macroeconomic implications of population aging: Evidence from Japan," Journal of Asian Economics, Elsevier, vol. 68(C).
    16. Philip Lane, 2007. "The Swedish external position and the krona," International Economics and Economic Policy, Springer, vol. 4(3), pages 263-279, November.
    17. Chiu, Yi-Bin & Sun, Chia-Hung D., 2016. "The role of savings rate in exchange rate and trade imbalance nexus: Cross-countries evidence," Economic Modelling, Elsevier, vol. 52(PB), pages 1017-1025.
    18. Zsofia Barany & Nicolas Coeurdacier & Stéphane Guibaud, 2015. "Fertility, Longevity and International Capital Flows," SciencePo Working papers hal-01164462, HAL.
    19. Maurice Obstfeld, 2025. "Natural and Neutral Real Interest Rates: Past and Future," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 73(2), pages 339-392, June.
    20. Gourinchas, Pierre-Olivier & Rey, Hélène, 2014. "External Adjustment, Global Imbalances, Valuation Effects," Handbook of International Economics, in: Gopinath, G. & Helpman, . & Rogoff, K. (ed.), Handbook of International Economics, edition 1, volume 4, chapter 0, pages 585-645, Elsevier.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:129084. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.