2016
DOI: 10.1111/obes.12149
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Determinants of Relative Sectoral Prices: The Role of Demographic Change

Abstract: Demographic change raises demand for non‐tradable old‐age related services relative to tradable commodities. This demand shift increases the relative price of non‐tradables and thereby causes real exchange rates to appreciate. We claim that the change in demand affects prices via imperfect intersectoral factor mobility. Using a sample of 15 OECD countries, we estimate a robust increase of relative prices. According to our main estimate, up to one fifth of the average increase in relative prices between 1970 an… Show more

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Cited by 14 publications
(10 citation statements)
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“…Since these countries are also those that the model predicts to have the biggest demographics-induced growth of labor productivity (GDP per unit of effective labor employed), demographic change features as a factor that can alleviate the "allocation puzzle" (Gourinchas and Jeanne, 2013), as also noticed by Bárány et al (2019) and Sposi (2019). 9 The model of this world economy predicts a clear positive relationship between the growth rate of the old-dependency ratio and the growth rate of the relative price of nontradables, both in partial and general equilibrium, thus confirming existing empirical estimates (Groneck and Kaufmann, 2017).…”
supporting
confidence: 79%
“…Since these countries are also those that the model predicts to have the biggest demographics-induced growth of labor productivity (GDP per unit of effective labor employed), demographic change features as a factor that can alleviate the "allocation puzzle" (Gourinchas and Jeanne, 2013), as also noticed by Bárány et al (2019) and Sposi (2019). 9 The model of this world economy predicts a clear positive relationship between the growth rate of the old-dependency ratio and the growth rate of the relative price of nontradables, both in partial and general equilibrium, thus confirming existing empirical estimates (Groneck and Kaufmann, 2017).…”
supporting
confidence: 79%
“…In particular, the elderly consume more non-traded services relative to working-age people, implying an increase in overall demand for those goods in the presence of population ageing (Groneck & Kaufmann, 2017). At the same time, the old-age population has lower saving rates than younger cohorts, such that aggregate savings of an ageing society decline (Yoon et al, 2014) and aggregate consumption increases, again biased towards non-tradable goods.…”
Section: The G Ener Al S E T-up Of a B Eer Modelmentioning
confidence: 99%
“…Por el lado del consumo, además, existe evidencia de que la demanda relativa de bienes y servicios cambia con la edad. En efecto, el envejecimiento induce cambios en los patrones de consumo y en la demanda relativa de bienes y servicios, con un sesgo hacia estos últimos (Groneck & Kaufmann, 2017). Las cohortes de más edad tienden a consumir en mayor proporción ciertos bienes no duraderos (como la alimentación) y servicios habitualmente sujetos a tipos impositivos más reducidos o que incluso están exentos de impuestos (Naciones Unidas, 2009;Credit Suisse, 2015;Eurostat, 2019).…”
Section: Canales Teóricos Y Literaturaunclassified
“…Por otra parte, estas tendencias en el consumo implicarían cambios en la composición sectorial y ocupacional del empleo con repercusiones en el proceso de fijación de los salarios y de los precios de forma diferenciada por tipo de bien (Groneck & Kaufmann, 2017). Así, la tendencia hacia la polarización del empleo, observada desde principios de los años noventa y normalmente atribuida a los avances tecnológicos que resultan de la mecanización en tareas rutinarias, podría verse acelerada también por razones demográficas (Sebastián, 2018), y afectar a la recaudación impositiva (Blix, 2017).…”
Section: Canales Teóricos Y Literaturaunclassified