Date: Dec 21, 2020
By: Alicia García-Herrero
A Nataxis report recently explored the consequences of this important trend at the macro- and sectoral-level. It showed that a reduced labor supply creates a drag on growth. But this can be mitigated by higher labor participation, capital investment and policies that address productivity.
Nonetheless, this is a gravity-defying act.
With fewer workers and an increased elderly population requiring more savings to sustain spending in retirement, greater pressure on public finances is to be expected. As such, the more prepared an economy can be while still youthful, the more likely it is to age gracefully. [FULL STORY]