Demographic aging and the New Keynesian Phillips Curve
Ambrocio, Gene (26.10.2023)
Numero
16/2023Julkaisija
Bank of Finland
2023
Julkaisun pysyvä osoite on
https://urn.fi/URN:ISBN:978-952-323-451-2Tiivistelmä
I document a statistical link between old-age dependency ratios and average markups. I propose that a mechanism whereby households develop deep habits in consumption as they age could explain this feature of the data. I show that when this mechanism is embedded in an overlapping generations New Keynesian model, the slope of the New Keynesian Phillips Curve flattens as the population ages. Further, the contractionary effects of monetary policy surprises on output are amplified. These results suggest that the challenges faced by monetary policy may become more pronounced as populations age.
Julkaisuhuomautus
Revised 15 October 2024.
Päivitetty 15.10.2024.
Päivitetty 15.10.2024.