Presentation by Dr Előd Takáts at a Research Seminar
Dr Előd Takáts of the Bank for International Settlements (BIS) was the invited speaker of the Research Seminar organised by the Institute of Mathematics and Statistical Modeling in late April.Dr Előd Takáts of the Bank for International Settlements (BIS) was the invited speaker of the Research Seminar organised by the Institute of Mathematics and Statistical Modeling in late April. The title of his presentation was “Inflation and demography through time”.
Abstract:
Demography accounts for a large share of low frequency inflation variation in 22 countries from 1870 to 2016. The dependent population (young and old) is associated with higher, and the working age population with lower inflation. The relationship is robust across different sub-samples and specifications, including dynamic Phillips curve settings, suggesting that it is not spurious. A natural experiment involving exogenous population shocks from the two world wars provides further support for the relationship. The observed pattern is broadly consistent with delayed monetary policy responses to demography-induced changes in the natural interest rate.
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