Ageing affecting the Americas?: exploring the growth direction: the relationship between the elderly population and economic growth in the American context.

Abstract

The main aim of this study is to explore the relationship between the elderly population and economic growth in 25 North and South American countries use annual secondary data from 1961 to 2021. Instead of focusing on the conditional mean, this study tests for Granger causality in the entire conditional distribution of the elderly population and economic growth through wavelet coherence analysis. The study findings indicated a unidirectional Granger causality running from per capita gross domestic product (GDP) to the elderly population for Bolivia, Colombia, Guyana, Peru and Puerto Rico and also from elderly population to per capita GDP for Costa Rica, Ecuador and Honduras. However, there is no causal relationship between the elderly population and economic growth for the rest of the countries. Wavelet coherence analysis depicted that economic growth positively led the elderly population in North America during the early 21st century. Furthermore, economic growth had been negatively leading the elderly population in South America throughout the period under consideration. This empirical study shows that policymakers of these economies need to analyse the transformation in the elderly population-economic growth causality robustness throughout the year when devising policies.