DEMOGRAPHIC IMPACT ON INFLATION IN SOUTHEASTERN EUROPEAN COUNTRIES
DEMOGRAPHIC IMPACT ON INFLATION IN SOUTHEASTERN EUROPEAN COUNTRIES

Author(s): Marija Trpkova-Nestorovska, Biljana Tashevska
Subject(s): National Economy, Demography and human biology, Financial Markets, Socio-Economic Research
Published by: Sveučilište Josipa Jurja Strossmayera u Osijeku, Ekonomski fakultet u Osijeku
Keywords: demographic aging; inflation; panel regression;
Summary/Abstract: The phenomenon described as a link between demography and inflation has been particularly interesting. Extensive research has found that an expanding dependent population (young and old) is associated with higher inflation. On the other hand, an increasing working cohort is correlated with lower inflation. This study aims to investigate a potential association between demographic aging and inflation in countries of Southeast Europe by using the panel regression model. Using inflation as the dependent variable, the model includes a set of demographic and economic variables. The effects of dependency ratio, old-age dependency ratio, life expectancy, population growth, GDP growth and M2 growth are to be examined in the estimated models. The results confirm that inflation also rises as the old-age dependency ratio increases. This is an important insight that considers demographic changes as one of the major forces that shape the economic backdrop in a specific set of developing countries.

• Details
• Contents