Mary: This is Mary Walden with economist MW welcoming you to the economic perspective. Today’s program looks at age and economic growth revisited. Mike, one of the reasons often given for why the economy has been growing slowly is our aging society. Economists have argued older households spend less, so as the proportion of older individuals in our country increases, it would be expected the pace of our economy slows. But now I understand some new research questions this viewpoint. Please elaborate.
Mike: Summary Answer
- As is often the case in economics, if you wait long enough you’ll get a contrary view
- New research looked at change in gdp per capita compared to change in proportion of the population that is older
- Examined for countries between 1990 and 2015
- Found no statistical relationship
- However – discovered simple explanation
- Found that more rapidly aging countries were motivated to develop and use more efficiency-enhancing technology
- The better technology balanced the drop in spending by older people
- Likely more research to come on this very important topic
- I’m MW
Mary: And I’m Mary Walden for the North Carolina Cooperative Extension Service.