The impact of demographics on economic policy: a huge risk often ignored

Abstract

This paper examines the influence of demographics on the economic demands of a population in a democracy. We argue in this paper that one country’s demographic profile will drive its economic policies in a manner that may seem at odds with the rational behavior of another country, unless one realizes the implications of demographic imbalances among countries. This paper highlights the conflicts that have arisen and will arise among countries as policies differ. In particular we are concerned with understanding how long term trends in decision-making can create market risks and opportunities based on different demographic forces. Awareness of demographic trends will often lead to a more effective understanding of a nation’s economic policy and its impact on the world’s economy.risk; demographics; monetary policy; democracy