Demographic dynamics and long-run development: Insights for the secular stagnation debate
Matteo Cervellati, Uwe Sunde & Klaus F. Zimmermann
#2016-049
This paper takes a global, long-run perspective on the recent debate
about secular stagnation, which has so far mainly focused on the short
term. The analysis is motivated by observing the interplay between the
economic and demographic transition that has occurred in the developed
world over the past 150 years. To the extent that high growth rates in
the past have partly been the consequence of singular changes during the
economic and demographic transition, growth is likely to become more
moderate once the transition is completed. At the same time, a similar
transition is on its way in most developing countries, with profound
consequences for the development prospects in these countries, but also
for global comparative development. The evidence presented here suggests
that long-run development dynamics have potentially important
implications for the prospects of human and physical capital
accumulation, the evolution of productivity and the question of secular
stagnation.
JEL Classification: C54, E10, J11, J 13, J18, N30, O10, O40
Keywords: secular stagnation, long-term development, income growth,
demographic transition