Population Aging in Japan: Demographic Shock and Fiscal Sustainability

29 Pages Posted: 11 Aug 2009

See all articles by Hamid Faruqee

Hamid Faruqee

International Monetary Fund (IMF) - Research Department

Martin Mühleisen

affiliation not provided to SSRN

Multiple version iconThere are 2 versions of this paper

Date Written: April 2001

Abstract

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: Aging, Japan, Savings, Debt, Fiscal policy, Economic models

Suggested Citation

Faruqee, Hamid and Mühleisen, Martin, Population Aging in Japan: Demographic Shock and Fiscal Sustainability (April 2001). IMF Working Paper No. 01/40, Available at SSRN: https://ssrn.com/abstract=1445776

Hamid Faruqee (Contact Author)

International Monetary Fund (IMF) - Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States

Martin Mühleisen

affiliation not provided to SSRN

No Address Available

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