Demographic Change and Secular Stagnation

Is the ageing population evident across many developed countries a source of slower long-term economic growth?

Evidence supporting this view comes from new research published in the NIESR blog. Economists led by Professor Ron Smith claim that

"the ageing of the population in OECD countries, which is expected to continue in the next decades, may contribute to reduced innovation, reduced output growth and reduced real interest rates across OECD economies."

The ageing population brings opportunities and threats - the authors are careful to remind us that demography is not our destiny. Changes in labour force participation, net inward migration, investment in human capital and the impact of new technologies and collaborative behaviour can do much to overcome the numerical impact of changes in the age structure of the population.