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Abstract

This paper re-examines the relationship between population aging and economic growth. We confirm previous research such as Cutler, Poterba, Sheiner, and Summers (1990) and Acemoglu and Restrepo (2017) that show positive correlation between measures of population aging and per-capita output growth. Our contribution is demonstrating that this relationship breaks down when the adjustment of interest rates is inhibited by an effective lower bound on nominal rates as took place during the Great Financial Crisis decade. Indeed, during the “secular stagnation regime” of 2008-2015 that prevailed in a number of countries, aging had a negative impact on living standards, consistent with the secular stagnation hypothesis.

Citation

Gauti B. Eggertsson & Manuel Lancastre & Lawrence H. Summers, 2018. “Aging, Output Per Capita and Secular Stagnation,” NBER Working Papers 24902, National Bureau of Economic Research, Inc.

@article{eggertsson2019aging,
  title={Aging, output per capita, and secular stagnation},
  author={Eggertsson, Gauti B and Lancastre, Manuel and Summers, Lawrence H},
  journal={American Economic Review: Insights},
  volume={1},
  number={3},
  pages={325--342},
  year={2019},
  publisher={American Economic Association 2014 Broadway, Suite 305, Nashville, TN 37203}
}