Summary of Age and Inflation

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Age and Inflation summary
Though subdued for now, inflation could make a comeback as the population ages.


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Economists have a number of theories about why inflation flares up during certain periods and dies down in others. While age trends within a population are seldom-explored causes of inflation, new evidence suggests that they may be important drivers. Economists Mikael Juselius and Elöd Takáts find that a large working-age population correlates with disinflationary periods, while inflationary times occur when the young and old dominate. So as many of the world’s major economies age, inflation may make a comeback. getAbstract recommends this important article to economists and others interested in how age-related trends might affect future prices.

In this summary, you will learn

  • Why large blocs of young and old in the population correspond to higher inflation,
  • Why current explanations for inflation fall short, and
  • How rapidly aging populations could exacerbate inflation in coming decades.


Individuals are most likely to borrow in their youth, save during their working years and subsist on savings when they are old. If this holds true, inflationary pressure rises when there are lots of young and old people, who consume but don’t necessarily produce much. On the other hand, prices fall ...
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About the Authors

Mikael Juselius is a senior economist at the Bank of Finland. Elöd Takáts is a senior economist at the Bank for International Settlements.

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