Staff Reports
Demography, National Savings and International Capital Flows
December 1997 Number 34
JEL classification: F21, J1

Author: Matthew Higgins

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.

Available only in PDFPDF38 pages / 286 kb

For a published version of this report, see Matthew Higgins, "Demography, National Savings, and International Capital Flows," International Economic Review 39, no. 2 (May 1998): 343-69.

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