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    Bank of Finland, Rauhankatu 19 B, Helsinki

Yulia Vymyatnina (European University at St. Petersburg): Inflation and Population Age Structure: the Case of Emerging Economies

Co-author: Darya Antonova (European University at St. Petersburg)

Abstract
The paper addresses the question of relation between inflation and population age structure for emerging market economies. We form an unbalanced panel of data for 21 countries for the period 1950-2017 and include a number of additional control variables – terms of trade, exchange rate regime, debt-to-GDP ratio, money supply growth rates, PPP-adjusted GDP per capita index. Trying a variety of model specifications and robustness checks we conclude that the ‘old’ group (65+) in these sample of countries is deflationary, ‘young’ group (0-19) shows weak signs of being deflationary as well, and ‘working’ group (20-64) is deduced to be inflationary. The deflationary effect of the elderly has been found in some studies for OECD countries, but ‘young’ being deflationary and ‘working’ being inflationary has not been previously found. Therefore, the question about general empirical relation between inflation and the population age structure remains unsettled, and it is probable that relation between population age structure and other macroeconomic variables for emerging market economies and for advanced countries is different.

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