The IMF Working Papers series is designed to make IMF staff research available to a wide audience. With nearly 300 released each year, working papers cover a wide range of theoretical and analytical topics, including balance of payments, monetary and fiscal issues, global liquidity, and national and international economic developments.
This paper develops a model to examine the macroeconomic implications of population aging. Using a general equilibrium framework, the analysis examines the various channels through which changes in demographics affect the economy. Age-earnings profiles are taken to summarize differences in effective labor supply across age groups and to help determine changes in consumption and saving behavior that occur over an agent's lifetime. Aggregating these supply- and demand-side effects, the implications of aging on economic activity and fiscal policy are then examined.