AREUEA invites you to a virtual seminar.

Date: Wednesday April 10 at 11:00 AM Eastern Time

Speaker: Jiro Yoshida (Penn State)

Paper Title: Aging, Homeownership, and Macroeconomic Inefficiency

Abstract: This study quantifies the macroeconomic impact of population aging, with a focus on the phenomenon of elderly households owning large houses that often become vacant after being transferred to younger generations. The study incorporates age-specific mortality rates and bequest motives in a quantitative overlapping generations model to generate a hump-shaped age profile for consumption and an upward-sloping age profile for housing and savings. When calibrated to the Japanese economy, the model indicates that housing demand driven by bequest motives increases the output level but reduces output growth due to low productivity growth in the housing sector. As a result, household income is allocated less to consumption and saving, the natural rate of interest is lower due to lower productivity and a larger production scale, and houses become less affordable due to higher house prices. These effects are more pronounced when households intend to bequeath housing rather than financial assets and when more houses become vacant upon inheritance. However, changing inheritance taxes have only negligible effects.

Registration Link: 

https://us06web.zoom.us/webinar/register/WN_X0otvsKkQsW66aqby8NbzA