Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/200806 
Authors: 
Year of Publication: 
2017
Citation: 
[Journal:] KDI Journal of Economic Policy [ISSN:] 2586-4130 [Volume:] 39 [Issue:] 2 [Publisher:] Korea Development Institute (KDI) [Place:] Sejong [Year:] 2017 [Pages:] 25-51
Publisher: 
Korea Development Institute (KDI), Sejong
Abstract: 
This paper employs an Overlapping Generations Model to quantify the impacts of Korea's demographic transition toward an older population on the total output growth rate. The model incorporates the projected population through 2060 according by Statistics Korea. The effects of the low fertility and increased life expectancy rates are studied. The model is considered suitable for analyzing the effects of demographic changes on the Korean economy. Under the assumption that the TFP growth rate will not slow considerably in the future, remaining at 1.3% per annum, the gross output growth rate of the Korean economy is projected to slow to 1.1% per annum in the 2050s, from 4.0% in the 2000s. The shrinking workforce due to the decline in fertility plays a significant role in the deceleration of the Korean economy. The increased life expectancy rate is expected to mitigate the negative effect, but the magnitude of its effect is found to be limited.
Subjects: 
Computable General Equilibrium Models
Life Cycle
Aggregate Supply
Population Aging
JEL: 
C680
E210
J110
Persistent Identifier of the first edition: 
Creative Commons License: 
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Document Type: 
Article

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