Due to a sharp decline in the fertility rate and a rapid increase in longevity, Japan's population aging is the furthest advanced in the world. In this study we explore the macroeconomic impact of population aging using a full-fledged overlapping generations model. Our model replicates well the...

Due to a sharp decline in the fertility rate and a rapid increase in longevity, Japan's population aging is the furthest advanced in the world. In this study we explore the macroeconomic impact of population aging using a full-fledged overlapping generations model. Our model replicates well the...

The lost decades following the bubble burst in 1991 has been accompanied by slowdown of total factor productivity (TFP) growth in Japan. What has driven the TFP down, however, remains a puzzle. To address this question, we develop a New Keynesian sticky price model that is designed to...