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A NOTE ON POPULATION AGING AND EFFECTIVENESS OF FISCAL POLICY

Published online by Cambridge University Press:  23 December 2020

Hiroaki Miyamoto  and
Naoyuki Yoshino
Hiroaki Miyamoto*
Affiliation:
Tokyo Metropolitan University
Naoyuki Yoshino
Affiliation:
Keio University
*
Address correspondence to: Hiroaki Miyamoto, Tokyo Metropolitan University, 1-1 Minami-Osawa, Hachioji-shi, Tokyo, 192-0397, Japan. e-mail: hmiyamoto@tmu.ac.jp
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Abstract

This paper examines how population aging affects the output effect of a government spending shock by using a panel data of OECD countries. The government spending shock is identified as a forecast error of government spending, and its output effect is estimated by using the local projection method. We find that population aging affects the output effect of the government spending shock. While in non-aging economies, government spending shock increases output significantly in both short- and medium-terms, in aging economies, output responses are not statistically significant.

Keywords

Population AgingFiscal PolicyFiscal Multipliers
Type
Notes
Information
Macroeconomic Dynamics , Volume 26 , Issue 6 , September 2022 , pp. 1679 - 1689
Copyright
© Cambridge University Press 2020

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Footnotes

We thank William A. Barnett (the editor), Francesco Zanetti (the coeditor), and two anonymous referees for their insightful comments and suggestions.

References

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