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

11 Pages Posted: 23 Jan 2017 Last revised: 23 Jul 2021

See all articles by Daron Acemoglu

Daron Acemoglu

Massachusetts Institute of Technology (MIT) - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Pascual Restrepo

Boston University - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: January 2017

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.

Suggested Citation

Acemoglu, Daron and Restrepo, Pascual, Secular Stagnation? The Effect of Aging on Economic Growth in the Age of Automation (January 2017). NBER Working Paper No. w23077, Available at SSRN: https://ssrn.com/abstract=2903778

Daron Acemoglu (Contact Author)

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

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Pascual Restrepo

Boston University - Department of Economics ( email )

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