This is a cause for celebration, not dismay. Population aging is in large part the result of positive forces as economies develop. The task ahead is to figure out how to make the right adjustments. Ignoring reality So what are the economic consequences of aging?
In “A Treatise on Money” published in 1930, Keynes referred to British deflation in the late 19th century and wrote “I consider, therefore, that the history of this period is a perfect example of a prolonged commodity deflation - developing and persisting in spite of a great increase in the total volume of bank money.” As a central banker, I am increasingly convinced that, when facing an unprecedented situation, what is required for us is to take a pragmatic approach without being dogmatic.