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Aging, Fertility and Macroeconomic Dynamics

Author

Listed:
  • Aurelien Eyquem

    (Univ Lyon, Université Lumière Lyon 2, GATE UMR 5824, F-69130 Ecully, France; Institut Universitaire de France.)

  • Masahige Hamano

    (Faculty of Political Science and Economics, Waseda University, 1-6-1 Nishiwaseda Shinjuku-ku, Tokyo 169-8050, Japan.)

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.In addition, demographic factors have direct effects on aggregate productivity through selection effects on the labor market. We show that aging and negative fertility shocks have opposite predictions in terms of their effects on GDP per capita and aggregate productivity.A quantitative exercise based on Japanese data suggests that an aging shock alone has relatively little effects and falls short in replicating the data, while considering negative fertility shocks fits the data much better.

Suggested Citation

  • Aurelien Eyquem & Masahige Hamano, 2022. "Aging, Fertility and Macroeconomic Dynamics," Working Papers 2121, Waseda University, Faculty of Political Science and Economics.
    • Handle: RePEc:wap:wpaper:2121
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    References listed on IDEAS

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    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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