Aging and deflation from a fiscal perspective
从政治经济学视角，将价格水平的财政理论嵌入世代交叠模型，分析老龄化对通胀的影响，发现老龄化因长寿导致时引发通缩，因出生率下降时则引发通胀，并重新审视了国债负担的传统争论。
Negative correlations between inflation and demographic aging have been observed across developed nations recently. To understand the phenomenon from a political economy perspective, we embed the fiscal theory of the price level into an overlapping-generations model. We suppose that short-lived governments successively choose income tax rates and bond issues, considering political influence from existing generations and the expected policy responses of future governments. Our analysis reveals that the effects of aging depend on its causes; aging is deflationary when caused by an unexpected increase in longevity, but is inflationary when caused by a decline in the birth rate. Our analysis also sheds new light on the traditional debate about the burden of national debt. Because of price adjustment, the accumulation of government debt imposes no burden on future generations.