Challenge
Proposal
In an ageing society, when a growing number of pensioners meets a decreasing number of working people, this leads to a decline in per capita GDP under otherwise unchanged conditions. However, the decline in the number of people in employment can be offset by higher labour productivity. Increased input of capital and technology increases the capital intensity of production and thus increases labour productivity. The investments required for this can be increased by net capital imports from abroad, including the corresponding trade balance deficit. Alternatively, in the phase when baby boomers are still in working age, the country can increase its investments at an early stage by reducing existing export surpluses.
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