Aging, Deflation, and Secular Stagnation

Federal Reserve Bank

Anton Braun

Research

9 Pages

The Federal Reserve Bank of Atlanta’s analysis explores how population aging exerts a lasting influence on key economic variables—namely, inflation, real interest rates, and GDP growth. It argues that demographic trends are a central driver of the low-inflation, low-growth environment characteristic of secular stagnation and will continue to shape economic outcomes even post-pandemic.

Key Takeaways

Aging depresses inflation and growth: Demographic shifts lead to lower inflation, reduced real interest rates, and slower GDP growth.
Trend predates COVID-19: These effects were evident before the pandemic and are expected to persist as populations continue to age.
Global phenomenon with regional variations: While the U.S. may experience milder effects, aging in other regions can still influence its economic conditions.
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