Excess of age (aging)

The fact that in the developed economies the birth rate is decreasing with the consequence that – the share of people over 65 is increasing while – the growth of the working population is decreasing. Therefore, such investment credits, which serve the acquisition of capital-saving technical progress, become worthwhile, and shares of corresponding companies should yield a relatively high return in the long run. – Overall, however, pressure is to be expected on the currencies of the countries or currency areas concerned, such as the euro zone, which are particularly affected by aging. This is because too many promises to pay for the future have already been taken on, especially pension and social benefits. This further increases the national debt; as early as 2040, the accumulated debt mountain in Germany will devour fifteen percent of the gross domestic product for interest payments. – See old-age dependency ratio, aging, demographic hardening, global macro, capital flight, Methuselah syndrome, sustainability, shadow debt, stagnation, secular, sustainability gap, senescence. – Cf. ECB Annual Report 2004, pp. 58 ff. (here also projections to 2050), ECB Monthly Bulletin of February 2007, p. 73 (overview of age-related government spending to 2050), ECB Monthly Bulletin of June 2009, pp. 93 ff. (projection of age-related government spending; overviews), Financial Stability Report 2013, p. 19 (unfavorable demographic development poses risks to pension institutions).

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
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