Demographic Change and Growth Assignment 2022

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Added on 2022-02-19

Demographic Change and Growth Assignment 2022

Added on 2022-02-19

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MSc in International Management
«Global Scenarios: Module 1 (Macroeconomics)»
Lecture 7
Demographic Change and Growth

Demographic Change and Growth Assignment 2022_1

G-20*: Population Distribution by Age
Groups (% of total population)
Source: IMF, “Macroeconomics of Aging and Policy Implications”, prepared by staff for the G20 2019
* https://ec.europa.eu/info/food-farming-fisheries/farming/international-cooperation/international-organisations/g20_en

Demographic Change and Growth Assignment 2022_2

Demographic Change: Main Drivers
progression of large-sized
cohorts to older ages
Declining fertility rates
Increasing longevity

Demographic Change and Growth Assignment 2022_3

Not only developed economies...
Robin Harding, “The costs of declining population”, Financial Times, Jan 14, 2020

Demographic Change and Growth Assignment 2022_4

MACROECONOMIC IMPLICATIONS:
LABOR INPUT

Demographic Change and Growth Assignment 2022_5

Macroeconomic Implications: Labor
• Recall our production function:
𝑌 = 𝐴𝐾1
3𝐿2
3
• Less workers available → lower output
• Implication: lower level of potential GDP

Demographic Change and Growth Assignment 2022_6

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