Would population aging affect the effectiveness of fiscal stimulus? Despite the renewed focus on population aging, there are few empirical studies on the output effects of fiscal policy in aging economies. Our study fills this gap by analyzing this issue in OECD countries. We find that, as...

This paper studies how population aging affects macroeconomic performance and the effectiveness of macroeconomic policies. By using a new Keynesian dynamic stochastic general equilibrium model with heterogeneous households, we find that the effectiveness of monetary policy diminishes as...

Advanced economies face two important trends: population aging and rising debt. In the coming years it will be critical to understand how policies undertaken by governments interact with their changing age structures. In a panel of advanced economies, I show that fiscal deficit consolidation...