Event Reports

KAS Japan Weekly COVID-19 Updates

by Cristita Marie Perez

Aging economies and fiscal stimulus

The latest research from the IMF has found out that fiscal stimulus is less effective in aging economies compared to economies with a younger population.

Key messages include:

  1. Aging economies often have a stagnating labor force with high public debt. These conditions lead to weaker effects on private consumption and investment, blunting the effect of fiscal stimulus packages.
  2. In aging economies, a larger fiscal stimulus might be required to increase demand during recessions. Other economic policies, including structural reforms, for example stronger female labor force participation or labor market needs-based immigration are needed to support fiscal stimulus packages.
Contact Person

Cristita Marie Perez

Cristita Marie Perez KAS

Senior Programme Manager, Regional Economic Programme Asia (SOPAS)

cristita.perez@kas.de +81 3 6426 5041