Economic impacts of population ageing on macroeconomic aggregates

Orlická, Eliška

This thesis examines the effect of population ageing on macroeconomic aggregates. The author´s objective is to verify, whether there exists any relationship of the population ageing factors and the GDP growth rate, social expenditures growth rate and the consumption growth rate. Econometric models are based on theoretical specifications of Faruqee´s life-cycle model and Prettner´s R&D model with overlapping generations. The degree of economic development is also taken into account. Furthermore, the author modified the R&D model by incorporation of the poverty indicator and its application on available datasets. The research is focused on five European countries in 1995 - 2013. The Ordinary Least Squares method is used to gain estimated results in regression analyses. The author managed to prove an existing relationship between the old age dependency ratio and the social expenditures in all countries except Switzerland. The impact of the population ageing factor on the consumption growth rate turned out to be significant in all of those countries. Substantial fluctuations are shown only in Bulgaria and in the Czech Republic. The GDP growth rate seems to be influenced by ageing factor in the Czech Republic and in the Ukraine alone. The research has also shown that developing countries respond more dramatically to changes in the population structure distribution, while the poverty indicator plays an important role only in the Ukraine.

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