Economic consequences of ageing with age-related technical progress

For most European countries, demographic forecasts show a clear ageing process during the coming decades, which will influence the long-term growth path of an economy. Output growth and savings ratio tend to decline when the group of 25- to 54-year olds shrinks, whereas the inflation rate increases in the long term. If the 55 to 64 age group declines, the current account balance shifts from a surplus to a deficit. The aim of this study is to further develop the method of the European Commission of calculating trend output, which models the link between ageing and productivity developments. Further reactions of macroeconomic indicators to ageing will be modelled with panel methods. The analysis will be carried out for the largest EU countries, Japan, the USA and Austria.