Rapid population ageing: What to expect?

The world is experiencing an acceleration of population ageing, affecting more and more regions. It is therefore important to consider the consequences of this situation: In theory, it gives rise to inflation and drives down the savings rate, resulting in higher nominal and real interest rates. The example of Japan shows that this is not certain: older people continue to save; labour market flexibility prevents wages from accelerating. Higher productivity gains are also expected in theory, yet this has not happened in Japan either; The capital requirement will be lower, driving down the net investment rate (and normally also preventing a situation of savings shortfall). However, it is possible that rising consumption of fixed capital (the declining life of capital) may reduce the fall in gross investment; Strong pressure on public finances, due to increased spending on health care and pensions. In countries with weak social welfare , households may worry and save more, which is the opposite of the trend expected.