Population, Wealth, and Economic Growth in the Asia and Pacific Region

48 Pages Posted: 20 Jan 2012

See all articles by Andrew W. Mason

Andrew W. Mason

University of Hawaii at Manoa; East-West Center - Research Program

Sang-Hyop Lee

University of Hawaii - Department of Economics

Date Written: October 1, 2011

Abstract

We explore how demographic changes in the Asia and Pacific region are likely to influence economic growth and other features of the regional economy. While many low-income countries in the region will continue to experience a demographic dividend, over time population aging could drag on economic growth, especially in East Asia. A second potential problem from population aging is the strain on public transfer systems the effects of which, although smaller than those in Europe, Japan, or Latin America, will still be large. Countering these problems, however, population aging will lead to substantial capital deepening, an effect of the second demographic dividend. Given current patterns of old-age consumption, production, and transfers, the total demand for pension assets will increase very substantially over the coming decades. Under these circumstances, aging should not depress savings rates. Capital deepening and high standards of living are attainable despite significant population aging.

Keywords: aging, demographic transition, economic growth, Asia, capital, wealth, saving, human capital, population, Economics Working Paper No. 280

JEL Classification: J10, O40, O47, E21, E01

Suggested Citation

Mason, Andrew W. and Lee, Sang-Hyop, Population, Wealth, and Economic Growth in the Asia and Pacific Region (October 1, 2011). Asian Development Bank Economics Working Paper No. 280, Available at SSRN: https://ssrn.com/abstract=1988586 or http://dx.doi.org/10.2139/ssrn.1988586

Andrew W. Mason (Contact Author)

University of Hawaii at Manoa ( email )

Honolulu, HI 96822
United States

East-West Center - Research Program ( email )

1601 East-West Road
Honolulu, HI 96848
United States

Sang-Hyop Lee

University of Hawaii - Department of Economics ( email )

2424 Maile Way, SSB 542
Honolulu, HI 96822
United States
808-956-8590 (Phone)

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