Demographics, Wealth, and Global Imbalances in the Twenty-First Century / Adrien Auclert, Hannes Malmberg, Frederic Martenet, Matthew Rognlie.

Format:

Book

Author/Creator:

Auclert, Adrien.

Contributor:

National Bureau of Economic Research.

Malmberg, Hannes.

Martenet, Frederic.

Rognlie, Matthew.

Series:

Working Paper Series (National Bureau of Economic Research) no. w29161.

NBER working paper series no. w29161

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2021.

Summary:

We use a sufficient statistic approach to quantify the general equilibrium effects of population aging on wealth accumulation, expected asset returns, and global imbalances. Combining population forecasts with household survey data from 25 countries, we measure the compositional effect of aging: how a changing age distribution affects wealth-to-GDP, holding the age profiles of assets and labor income fixed. In a baseline overlapping generations model this statistic, in conjunction with cross-sectional information and two standard macro parameters, pins down general equilibrium outcomes. Since the compositional effect is positive, large, and heterogeneous across countries, our model predicts that population aging will increase wealth-to- GDP ratios, lower asset returns, and widen global imbalances through the twenty-first century. These conclusions extend to a richer model in which bequests, individual savings, and the tax-and-transfer system all respond to demographic change.

Notes:

Print version record

August 2021.