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Social Science > Demography

You are looking at 1 - 4 of 4 items for :

  • Type: Journal Issue x
  • Computable and Other Applied General Equilibrium Models x
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Cover IMF Working Papers
Macroeconomic Effects of Climate Change in an Aging World
Mr. Vimal V Thakoor
and
Engin Kara
Climate and demographic changes are two major long-term trends that are evolving simultaneously. The global population is aging, while climate change is increasing the frequency and severity of weather-related disasters and lowering productivity. This paper examines the macroeconomic effects of these three changes in a common framework. Simulation results suggest that while aging drags down the real interest rate, climate change puts upward pressure on the real interest rate and inflation. As climate change intensifies, it will be the dominant factor shaping the macroeconomic variables. This results in higher inflation and a higher debt-to-GDP ratio, requiring tighter fiscal and monetary policies. The results further suggest that economic uncertainty induced by climate change amplifies these effects of climate change.
Keywords:
Demographic change; climate change; natural disasters; simulation result; results summary; disaster shock; effects of climate change; consumption share; Consumption; Aging; Real interest rates; Global
Cover IMF Working Papers
Can Inheritances Alleviate the Demographic Burden?
Mr. Erik Lueth
With pay-as-you-go schemes in place, population aging will impose a heavy fiscal burden on young and future cohorts. However, these cohorts may also profit from larger inheritances as the number of heirs declines. The aim of this paper is to explore the compensating potential of private intergenerational transfers. A dynamic, computable general equilibrium model is employed allowing for a pay-as-you-go scheme, various bequest motives, and an endogenous labor supply. The findings are twofold. First, the increase in future generations' inheritances is insufficient to make up for the demographic burden. Second, increasing the inheritance tax during the demographic transition may alleviate the fiscal burden of future generations by improving overall efficiency.
Keywords:
WP; tax burden; utility function; Bequests; Taxation; computable GEM; factor income; offspring's net wage; price movement; budget constraint; pay-as-you-go scheme; opportunity cost; price effect; labor disincentive effect; capital income share; Labor supply; Demographic change; Tax allowances; Aging; Social assistance spending
Cover IMF Working Papers
Population Aging in Japan: Demographic Shock and Fiscal Sustainability
Mr. Martin Mühleisen
and
Mr. Hamid Faruqee
The paper develops a general equilibrium framework to examine the economic implications of population aging in Japan. Particular attention is paid to aggregate saving behavior which is modeled on the basis of empirical age-earnings profiles using a life-cycle approach. The paper's objectives are to (i) estimate the output loss caused by demographic changes and assess the impact of aging on Japan's government finances; and (ii) compare fiscal policy options with respect to their effects on output growth and economic welfare. The paper develops a general equilibrium framework to examine the economic implications of population aging in Japan. Particular attention is paid to aggregate saving behavior which is modeled on the basis of empirical age-earnings profiles using a life-cycle approach. The paper's objectives are to (i) estimate the output loss caused by demographic changes and assess the impact of aging on Japan's government finances; and (ii) compare fiscal policy options with respect to their effects on output growth and economic welfare. The paper develops a general equilibrium framework to examine the economic implications of population aging in Japan. Particular attention is paid to aggregate saving behavior which is modeled on the basis of empirical age-earnings profiles using a life-cycle approach. The paper's objectives are to (i) estimate the output loss caused by demographic changes and assess the impact of aging on Japan's government finances; and (ii) compare fiscal policy options with respect to their effects on output growth and economic welfare.
Keywords:
WP; earnings; fiscal policy; age-earnings profile; Japan; aging; saving; general equilibrium analysis; debt situation; Japan block; pension liability; cyclical position; earnings difference; life-cycle earnings profile; A. Age-earnings profile; Demographic change; Securities; Wages; Global
Cover IMF Working Papers
The Insurance Role of Social Security: Theory and Lessons for Policy Reform
Mr. Victor Hugo Valdivia
This paper examines the impact of social security on welfare. The provision of social security reduces precautionary savings and encourages early retirement. Consequently, it lowers aggregate capital, employment, output, and consumption. On the other hand, it also provides old age insurance. This trade-off is examined using a life-cycle general equilibrium model. The paper finds that the current U.S. Social Security system can improve welfare even though the levels of aggregate output, employment, capital, and consumption fall relative to their levels without such a system. The welfare gains arise from insurance against living much longer than expected.
Keywords:
WP; early retirement; adverse selection; Social Security; Public Finance; Computable General Equilibrium; welfare gain; earnings profile; Social Security benefit; impact of Social Security; consumption decision rule; insurance value; Securities; Insurance; Aging; Retirement; Consumption