'A dynamic new Keynesian life-cycle model: Societal aging, demographics, and monetary policy' by Ippei Fujiwara and Yuki Teranishi. A comment

摘要

Fujiwara and Teranishi analyze the interaction between population ageing and monetary policy using a New-Keynesian version of Gertler's (1999) model. The central bank faces a tradeoff between welfare of workers and retirees since monetary policy alters this welfare distribution. The model breaks the link between stabilization of inflation and stabilization of output gap. The authors, however, ignore the ongoing decline in fertility, the long-lasting transition to an aged society and, most importantly, the interaction between pension system and monetary policy. These would be essential features in selling the results to policy-makers.