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.
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.