Demography, National Savings and International Capital Flows
International Economic Review, Vol. 39, No. 2, May 1998, pp. 343-369
FRB of New York Staff Report No. 34
38 Pages Posted: 9 Nov 2006 Last revised: 10 Nov 2021
Date Written: October 1, 1996
Abstract
This paper addresses the relationship between age distributions, national savings and the current account balance. The results point to substantial demographic effects, with increases in both the youth and old-age dependency ratios associated with lower savings rates. They also point to differential effects on savings and investment, and thus to a role for demography in determining the current account balance. The estimated demographic effect on the current account balance exceeds six percent of GDP over the last three decades for a number of countries and, given expected demographic trends, is likely to be substantially larger over the coming decades.
JEL Classification: F21, J1
Suggested Citation: Suggested Citation
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