Aging and the Macroeconomy Long-Term Implications of an Older Population (2012) / Chapter Skim
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1 Introduction
1 Introduction
Pages 5-11
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From page 5... ...
The level of benefits provided by Social Security rose substantially in real terms during the early 1970s. The introduction of Medicare in 1965 reduced the costs of health care for retirees relative to what they might have planned for earlier in their working careers.
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From page 6... ...
The weak economy that has followed that global financial crisis has ended many working careers prematurely, while also lowering the value of many other components of household net worth, such as corporate equities. Moreover, the prospective returns on assets such as inflation-indexed bonds suggest that capital market returns may be low for a prolonged period, making it difficult for "near-retirees" to accumulate assets for their later years.
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From page 7... ...
. The latter involve consideration of how factors such as savings rates, stock market exposure, productivity, consumption patterns, and global capital flows react to demographic shifts.
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From page 8... ...
In analyzing the consequences of population aging in the United States, one must consider this aging phenomenon in the broader context of a globalized economy. There are likely to be substantial spillover effects of international trends on our country, and global conditions will influence macroeconomic variables.
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From page 9... ...
· Identify the degree of uncertainty associated with existing demographic forecasts and how it complicates predictions of economic behavior and macroeconomic performance. · Quantify in detail the influence of the baby boom generation on the path and likely end point of long-run trends in dependency ratios.
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From page 10... ...
· Investigate trends in private pension provisions and how those trends might be related to the transition to an older society. · Investigate what levels of personal savings would be necessary in order for people to sustain their living standards in retirement for various assumptions about retirement ages, health care cost growth, public sup port for older persons, and the effects of increased national savings on investment returns.
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From page 11... ...
The discussion considers various ways in which population aging affects capital markets, and emphasizes the importance of a global perspective. Chapter 8 looks at patterns of saving and wealth in the United States, considers whether saving is likely to be sufficient for future needs, and discusses several approaches to enhancing retirement security.
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