Demography and Inflation: An International Study

Changes in the relative share of different age groups in the population may present inflationary, disinflationary or even deflationary tendencies. We find evidence that increases in the share of the very old (age 80 and older) may be associated with deflation. The analysis is based on an international dataset over a long time period. Classifying age groups into young, working, younger old and older old, we find that the shares of the young and the younger old groups are inflationary, while those of the working group disinflationary, and those of the very old group seemingly deflationary.