Publication

This paper examines the implications of the demographic transition over the next 80 years for the US, Japan and the rest of the OECD and developing regions of the world. The authors use the dynamic intertemporal general equilibrium four-country model. They find that population aging in industrial countries will reduce aggregate growth in these regions over time, but should boost growth in developing countries over the next 20-30 years, as the relative size of their working-age population increases. Demographic change will also affect savings, investment and capital flows, implying changes in global trade balances and asset prices.