Demography, National Savings and International Capital Flows

38 Pages Posted: 9 Nov 2006

See all articles by Matthew Higgins

Matthew Higgins

Federal Reserve Bank of New York

Date Written: December 1997

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

Higgins, Matthew, Demography, National Savings and International Capital Flows (December 1997). FRB of New York Staff Report No. 34. Available at SSRN: https://ssrn.com/abstract=943495 or http://dx.doi.org/10.2139/ssrn.943495

Matthew Higgins (Contact Author)

Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States

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