Population ageing: What is really the nature of the threat?

Europe, Japan, China and the United States are and will be affected by population ageing. A decline in the savings rate, excess demand, inflation, and an external deficit are usually expected from such a development, but Japan’s example shows that these supposed consequences of ageing are not actually present. However, it is certain that there will be: An increase in certain public spending items (pensions, healthcare); A decline in potential growth; And therefore a potentially large fiscal deficit and a risk of a continued rise in the public debt ratio. The threat of population ageing therefore comes from public finances and not from inflation, especially if population ageing also drives down the global savings rate and drives up the real long-term interest rate.