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Global Aging Pressures: Impact of Fiscal Adjustment, Policy Cooperation, and Structural Reforms
Author:
Mr. Manmohan S. Kumar
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and
Mr. Dennis P Botman
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Series:
IMF Working Papers
Volume/Issue:
Volume 2007: Issue 196
Language:
English
Publication Date:
01 Aug 2007
DOI:
https://doi.org/10.5089/9781451867602.001
ISBN:
9781451867602
ISSN:
1018-5941
Pages:
58
Keywords:
WP; euro area; product market; real GDP; real interest rate; government spending
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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Demographic pressures will materialize in many economies over the next few decades. We examine the macroeconomic impact of alternative fiscal adjustment and structural reform strategies to address these global aging pressures using the IMF's Global Fiscal Model (GFM). The results suggest substantial spillover effects of aging through international financial channels. To maintain sustainability, fiscal adjustment needs to be broad-based, while avoiding increases in direct taxes. There are substantial benefits from fiscal cooperation, while negative growth effects can be offset by complementary structural reforms in product and labor markets with the benefits accruing early and to all incomegroups.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2007: Issue 196