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Martin Van der Linden
Martin Van der Linden
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In the article “Japan’s population problem” in The Japan Time, Hugh Cortazzi write:

Japanese leaders and Japanese people generally are well aware of their nation’s demographic challenges. The population has begun to decline […] The implications for the Japanese economy and for Japan’s position in the world should be obvious.

I can see some “intuitive” reason why a decline in population would be an issue for a country, mostly if it comes with a decline in the workforce (roughly decreased labor supply, decreased international competitveness and problems with funding pension system?). But I am interested in more careful and more general analysis.

My questions are:

  1. What are (if any) the challengedeconomic challenges of a declining population, in the case of Japan, or in general (or in general,if not too broad)?
  2. Does there exist modern macroeconomic models (say open economy DSGE) including demographics and studying declining populations ?
  3. Have some paper tried to compare the welfare costs of a declining population with the potential welfare benefits of a declining population (e.g. for a dense country like Japan, decreasing housing prices)?

In the article “Japan’s population problem” in The Japan Time, Hugh Cortazzi write:

Japanese leaders and Japanese people generally are well aware of their nation’s demographic challenges. The population has begun to decline […] The implications for the Japanese economy and for Japan’s position in the world should be obvious.

I can see some “intuitive” reason why a decline in population would be an issue for a country, mostly if it comes with a decline in the workforce (roughly decreased labor supply, decreased international competitveness and problems with funding pension system?). But I am interested in more careful and more general analysis.

My questions are:

  1. What are (if any) the challenged of a declining population, in the case of Japan, or in general (if not too broad)?
  2. Does there exist modern macroeconomic models (say open economy DSGE) including demographics and studying declining populations ?
  3. Have some paper tried to compare the welfare costs of a declining population with the potential welfare benefits of a declining population (e.g. for a dense country like Japan, decreasing housing prices)?

In the article “Japan’s population problem” in The Japan Time, Hugh Cortazzi write:

Japanese leaders and Japanese people generally are well aware of their nation’s demographic challenges. The population has begun to decline […] The implications for the Japanese economy and for Japan’s position in the world should be obvious.

I can see some “intuitive” reason why a decline in population would be an issue for a country, mostly if it comes with a decline in the workforce (roughly decreased labor supply, decreased international competitveness and problems with funding pension system?). But I am interested in more careful and more general analysis.

My questions are:

  1. What are (if any) the economic challenges of a declining population, in the case of Japan (or in general,if not too broad)?
  2. Does there exist modern macroeconomic models (say open economy DSGE) including demographics and studying declining populations ?
  3. Have some paper tried to compare the welfare costs of a declining population with the potential welfare benefits of a declining population (e.g. for a dense country like Japan, decreasing housing prices)?
Source Link
Martin Van der Linden
Martin Van der Linden
  • 5.2k
  • 24
  • 43

Economic impacts of a declining population

In the article “Japan’s population problem” in The Japan Time, Hugh Cortazzi write:

Japanese leaders and Japanese people generally are well aware of their nation’s demographic challenges. The population has begun to decline […] The implications for the Japanese economy and for Japan’s position in the world should be obvious.

I can see some “intuitive” reason why a decline in population would be an issue for a country, mostly if it comes with a decline in the workforce (roughly decreased labor supply, decreased international competitveness and problems with funding pension system?). But I am interested in more careful and more general analysis.

My questions are:

  1. What are (if any) the challenged of a declining population, in the case of Japan, or in general (if not too broad)?
  2. Does there exist modern macroeconomic models (say open economy DSGE) including demographics and studying declining populations ?
  3. Have some paper tried to compare the welfare costs of a declining population with the potential welfare benefits of a declining population (e.g. for a dense country like Japan, decreasing housing prices)?