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  3. American Economic Review
  4. May 2017
  5. Secular Stagnation? The Effect of Aging on Economic Growth in the Age of Automation

Secular Stagnation? The Effect of Aging on Economic Growth in the Age of Automation

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Abstract

Several recent theories emphasize the negative effects of an aging population on economic growth, either because of the lower labor force participation and productivity of older workers or because aging will create an excess of savings over desired investment, leading to secular stagnation. We show that there is no such negative relationship in the data. If anything, countries experiencing more rapid aging have grown more in recent decades. We suggest that this counterintuitive finding might reflect the more rapid adoption of automation technologies in countries undergoing more pronounced demographic changes and provide evidence and theoretical underpinnings for this argument.

Citation

Acemoglu, Daron, and Pascual Restrepo. 2017. "Secular Stagnation? The Effect of Aging on Economic Growth in the Age of Automation." American Economic Review, 107 (5): 174-79. DOI: 10.1257/aer.p20171101

Additional Materials

JEL Classification

  • E23 Macroeconomics: Production
  • E24 Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
  • E32 Business Fluctuations; Cycles
  • J11 Demographic Trends, Macroeconomic Effects, and Forecasts
  • J14 Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
  • O33 Technological Change: Choices and Consequences; Diffusion Processes