The economic dynamics of an ageing population: the case of four OECD countries
OECD Economic Studies No. 12, Spring 1989. Demographic changes such as population ageing have many effects that influence a country's fiscal viability. This paper uses a dynamic general-equilibrium model with overlapping generations to evaluate the macroeconomic and fiscal consequences of population ageing in four OECD countries: Japan, the Federal Republic of Germany, Sweden, and the United States. One of the fundamental lessons is that allowing for general equilibrium adjustments reduces the adverse welfare effects of increasing dependency ratios. Nevertheless, the welfare costs and their distributions acmss cohorts pose serious challenges to policy-makers in some cases.
Long abstract
