The huge wave of that generation simply overwhelms the charts. Born between 1946 and 1964, 2  BIS central bankers’ speeches  the youngest boomers are turning 50 this year. And so, right now, we are seeing a very predictable demographic bulge of more people, putting away more savings. This is Mother Nature at work, and it’s where things get interesting.
First, in the absence of nominal exchange rate flexibility, any real exchange rate adjustment had to be delivered via cuts in wage costs and prices combined with enhancements in labour productivity. The adjustment in wages was both market-driven, owing to a sharp decline in the demand for labour, and supported by policies aimed at cutting public sector wage costs.