Aging and Deflation from a Fiscal Perspective

• Project/Area Number: 26780177
• Research Category: Grant-in-Aid for Young Scientists (B)
• Allocation Type: Multi-year Fund
• Research Field: Public finance/Public economy
• Research Institution: Waseda University
• Principal Investigator: Ueda Kozo 早稲田大学, 政治経済学術院, 教授 (30708558)
• Project Period (FY): 2014-04-01 – 2018-03-31
• Project Status: Completed (Fiscal Year 2017)
• Budget Amount: ¥3,770,000 (Direct Cost: ¥2,900,000、Indirect Cost: ¥870,000); Fiscal Year 2017: ¥910,000 (Direct Cost: ¥700,000、Indirect Cost: ¥210,000); Fiscal Year 2016: ¥1,040,000 (Direct Cost: ¥800,000、Indirect Cost: ¥240,000); Fiscal Year 2015: ¥910,000 (Direct Cost: ¥700,000、Indirect Cost: ¥210,000); Fiscal Year 2014: ¥910,000 (Direct Cost: ¥700,000、Indirect Cost: ¥210,000)
• Keywords: 物価水準の財政理論 / 少子高齢化 / デフレ / 量的緩和

Outline of Final Research Achievements

Negative correlations between inflation and demographic aging were observed across developed nations recently. To understand the phenomenon from a politico-economic perspective,we embed the fiscal theory of the price level into an overlapping-generations model. In the model, successive short-lived governments choose income tax rates and bond issues considering the political influence of existing generations and the policy response of future governments. The model sheds new light on the traditional debate about the burden of national debt. Because of price adjustments, the accumulation of government debt does not become a burden on future generations. Our analysis reveals that the effects of aging depend on its causes. Aging is deflationary when caused by an increase in longevity but inflationary when caused by a decline in birth rate. Numerical simulation shows that aging over the past 40 years in Japan generated deflation of about 0.6 percentage points annually.

Research Products

• [Journal Article] Aging and deflation from a fiscal perspective (2014)
  • Author(s): Mitsuru Katagiri, Hideki Konishi, and Kozo Ueda
  • Journal Title: KIER Working Papers Volume: 905
  • Open Access / Acknowledgement Compliant
• [Journal Article] Aging and deflation from a fiscal perspective (2014)
  • Author(s): Mitsuru Katagiri, Hideki Konishi, and Kozo Ueda
  • Journal Title: Globalization and Monetary Policy Institute Working Paper Volume: 218
  • Open Access / Acknowledgement Compliant
• [Presentation] 人口動態とデフレ (2017)
  • Author(s): 上田晃三
  • Organizer: 一橋大学政策フォーラム
  • Place of Presentation: 八重洲カンファレンスセンター（東京）
  • Year and Date: 2017-02-17
  • Invited
• [Presentation] Aging and Deflation from a Fiscal Perspective (2017)
  • Author(s): Kozo Ueda
  • Organizer: Bank of Finland/CEPR Conference on Demographics and the Macroeconomy
• [Presentation] Aging and Deflation from a Fiscal Perspective (2016)
  • Author(s): Kozo Ueda
  • Organizer: ヘルシンキ大学セミナー
  • Place of Presentation: ヘルシンキ大学（フィンランド、ヘルシンキ）
  • Year and Date: 2016-10-26
  • Invited
• [Presentation] Aging and Deflation from a Fiscal Perspective (2016)
  • Author(s): Kozo Ueda
  • Organizer: 一橋大学セミナー
  • Place of Presentation: 一橋大学（東京）
  • Year and Date: 2016-08-02
  • Invited
• [Presentation] Aging and deflation from a fiscal perspective (2015)
  • Author(s): Kozo Ueda
  • Organizer: European Economic Association
  • Place of Presentation: ドイツ・マンハイム
  • Year and Date: 2015-08-25
  • Int'l Joint Research
• [Presentation] Aging and deflation from a fiscal perspective (2015)
  • Author(s): Kozo Ueda
  • Organizer: Computing in Economics and Finance
  • Place of Presentation: 台湾・台北
  • Year and Date: 2015-06-20
  • Int'l Joint Research
• [Presentation] Aging and deflation from a fiscal perspective (2015)
  • Author(s): Kozo Ueda
  • Organizer: Seminar
  • Place of Presentation: Paris School of Economics
  • Year and Date: 2015-03-10
• [Presentation] Aging and deflation from a fiscal perspective (2014)
  • Author(s): Kozo Ueda
  • Organizer: Workshop
  • Place of Presentation: Canon Institute of Global Studies
  • Year and Date: 2014-12-26