When central banks set nominal interest rates according to an interest rate reaction function, such as the Taylor rule, and the exchange rate is priced by uncovered interest parity, the real exchange rate is determined by expected inflation differentials and output gap differentials. In this...

We estimate the age distribution's effect on business cycle fluctuations across a large number of countries. A 10 percentage point increase in the middle-aged share of the population decreases output volatility by 15 percent for the average country