DISCUSSION PAPER PI-9703
Financial Markets, Ageing and Social Welfare
Professor of Finance, Imperial College, London
This paper, which is the text of the author's inaugural lecture at
Imperial College London, reviews the principal macroeconomic
issues associated with demographic shifts in population in Europe.
The implications for savings rates, labour income and capital accumulation
are addressed qualitatively as well as within a simplified calibrated
open economy computational general equilibrium model of overlapping
generations populations for Europe. Declines in the UK savings rate are
projected, even when open economy assumptions are removed. The
author also reviews the shift towards fully funded schemes and discusses
relevant economic arguments.