Consequences of Demographic Change in Germany: An Introduction

Abstract

Demographic change as it is nowadays observed in many developed countries is largely unprecedented. There are thus certain limitations to systematically analyzing its economic and fiscal consequences, which is the common task of the contributions collected in this volume, using Germany as an illustrative example. Hard, backward-looking empirical evidence on this issue is necessarily lacking. All that remains to be brought forth are theory-based predictions and projections. Yet, like the set of institutions that will be affected by demographic change, and will also shape how its impact is working its way through the economy and fiscal system of a given country, most of the theoretical models that can be applied in this area have been devised under the conditions of growing populations with a relatively stable age composition. Therefore, conventional economic wisdom may fail to fully capture the numerous channels through which the effects of demographic change will eventually spread out.