Economic and financial market consequences of ageing populations

The implications of ageing populations over the coming decades at the global level will be significant in terms of not only a slowdown in the growth rate of output and living standards but also with regard to fiscal and financial market trends. Given the backdrop of the downward trend in world-wide potential growth rates over the past number of decades, driven by falling rates of capital accumulation and a slowdown in productivity growth, the additional negative impact of relative declines in the growth rate of working age populations over the coming decades bodes ominously for future world-wide economic developments. The focus of the present paper is to quantify and analyse the nature, extent and geographical reach of the "real" economy and budgetary aspects of ageing populations as well as providing an initial assessment of the financial market implications of this phenomenon.population ageing, growth rate, productivity growth, working age population, Mc Morrow, R�ger

EU pension reform - An overview of the debate and an empirical assessment of the main policy reform options

This paper on European Union (EU) pension reform provides an overview of the debate and, on the basis of a series of model simulations, makes an empirical assessment of the main pension policy reform options at the EU, not the Member State, level. It estimates what it would take to bring the public PAYG pension system back into equilibrium and assesses the case for a shift to funding. The main conclusion of this paper is that the EU pension system should in the very long run (i.e. over more than one generation) be fully funded, with this being achieved using a two-stage optimal transition path. Stage one of this transition process should concentrate on stabilising the PAYG system and achieving a partial shift to funding, with stage two only occurring once circumstances permit. The fully funded system, once established, should have public and private pillars, with the public system in effect replacing the old PAYG system with a similar compulsory, defined benefit, system and with the private pillar being a voluntary, defined contribution, system.pension reform, policy reform options, ageing model, Mc Morrow, R�ger,

Some selected simulation experiments with the European Commission's QUEST model

This paper presents a set of simulation experiments using the European Commission's QUEST model to evaluate the effects of policy impulses and permanent supply side shocks in the four major EU economies. The simulation analysis illustrates the transmission mechanisms of specific monetary and fiscal policy shocks as well as two examples of permanent supply shocks.QUEST model, supply side shocks, monetary and fiscal policy, R�ger, in 't Veld,

A characterization of quadratic-multiplicative mappings

In the spirit of some earlier studies of Jean Dhombres, Roman Ger and Ludwig Reich we discuss the alienation problem for quadratic and multiplicative mappings

The Lisbon Strategy and the EU's structural productivity problem

The structural nature of the EU's productivity downturn is confirmed by the analysis in this paper, with the bulk of the deterioration emanating from an outdated and inflexible industrial structure which has been slow to adapt to the intensifying pressures of globalisation and rapid technological change. The EU's productivity problems are driven by the combined effect ofan excessive focus on low and medium-technology industries (with declining productivity growth rates and a globalisation-induced contraction in investment levels); an inability to seriously challenge the US's dominance in large areas of the ICT industry, as reflected in the relatively small size of its ICT production sector; and finally, its apparent slowness in reaping the productivity enhancing benefits of ICT in a range of ICT-using industries, although measurement issues severely complicate an assessment of the gains from ICT production and diffusion.lisbon strategy, productivity, growth, labour market, Denis, Mc Morrow, R�ger, Veugelers, structural productivity

An analysis of EU and US productivity developments (a total economy and industry level perspective)

The 1990s witnessed some important shifts in the underlying growth performances of the EU and US economies, with a significant gap opening up in terms of GDP, and more importantly, GDP per capita, growth rates. From a situation over the period 1980-1995 when EU and US living standards were growing at roughly an equivalent rate, the second half of the 1990s saw the emergence of a significant growth gap in favour of the US. These EU-US differences are mirrored at the EU Member State level, with simple measures of dispersion indicating that individual country divergences relative to the average EU performance have grown by close to 50 per cent in the 1990s compared with the 1980s. These extra- and intra-EU divergences in economic fortunes have been the subject of intense research efforts in recent years, with policy makers keen to decipher the reasons for their own respective outturns and to further refine the “magic formula†for boosting their long run growth performances. The present study will contribute to this ongoing debate regarding the sources of growth in general, with specific attention being devoted to productivity determinants given their importance in shaping medium to long run changes in living standards.GDP, United States, US, productivity, labour productivity, industry, industry level analysis, Denis, McMorrow, R�ger

Production function approach to calculating potential growth and output gaps - estimates for the EU Member States and the US

This paper describes the methodology for calculating potential growth and output gaps using a production function approach. On the basis of the Commission services Spring 2002 economic forecasts, the approach is illustrated by providing estimates for the EU's Member States, the Euro Zone and EU15 aggregates as well as for the United States.production function, growth and output, economic forecasts, Denis, Mc Morrow, R�ger

The EU-US total factor productivity gap : An industry perspective

This paper uses the EU KLEMS industry growth accounting database to explore the determinants of the EU-US total factor productivity (TFP) growth gap which started to emerge in the mid-1990's.Growth determinants, Total Factor Productivity, European Union, Havik, Mc Morrow, R�ger, Roeger, Turrini, klems, eu klems

Globalisation : trends, issues and macro implications for the EU

Globalisation, defined as an increasingly integrated world economy, has the potential to generate the largest structural upheaval in economies since the industrial revolution. As in the past, this process is being underpinned by both technological change and by a shift in policies in many countries towards a more open, market based, system of economic governance. These policies reflect the realities of a new world order where knowledge creation and absorption and the flexibility of the regulatory and institutional frameworks will be the key determinants of the economic fortunes of economies. This paper examines the historical empirical evidence regarding globalisation and quantifies the macro benefits and costs for the EU over the coming decades.globalisation, trade integration, global productivity, terms of trade, Denis , Mc Morrow, R�ger