No Answers Only Questions

One person who could rightly claim to know more about global ageing and its possible consequences than anyone else in the business is the German Director of the Manheim Research Institute for the Economics of Ageing Axel B?rsch-Supan. If there’s a conference being organised, he seems to be there. Actually his comments at both these meet-ups are well worth reading in and of themselves (here, and here).

In a sense B?rsch-Supan is almost uniquely qualified to express opinions on the topic since he has both devoted a large part of his professional career to studying the question, and he lives and works in a society which is already reeling under the impact. As he says:

“Today?s Germany has essentially the demographic structure that the United States will reach in a quarter of a century. The dependency ratio (the ratio of persons aged 65 and over to those aged from 20 to 59) is at 28 percent, and it will reach 75 percent in 2075, if we dare project that far. Almost one-fifth of the German population today are aged 65 and over. One quarter are aged 60 and over, which is relevant because the average retirement age in Germany is 59.5 years. Thus, in this sense the United States is not ?entering largely uncharted territory,? …. Rather, they can look to Europe?in particular to Germany and Italy?to see what will happen in the United States.”

I mention B?rsch-Supan because he serves as a good pretext for going over where we are to date with the issue. As he says himself. watching demography change is rather like watching a glacier melt, on a day-to-day basis it’s hard to see that anything is happening, but over time the impact is important.

One of his recent papers has the intriguing title: “Global Ageing: Issues, Answers, More Questions“. It is a good up-to-date review of the ‘state of the art’, and a quick examination of the points he makes probably serves as a good starting point, since I can’t help thinking, in the case of global ageing, it isn’t so much what we know that matters, it’s what we don’t know.

So here we go, a review of what we “know”, what we think we know, and what we don’t know:
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The Last Foreign Correspondent

This is really a case of two stories in search of a common theme: a theme, that is, which goes beyond the rather random unifying factor of the work of Shanghai based ‘foreign correspondent’ Fons Tuinstra. In fact both points emerged from browsing his blog.

In the first place we have the problem with the uses and abuses of statistics – an issue which surfaced once more this week with the outrageous use of the carefully crafted 7% Japanese GDP growth number (those looking for a rather more jaundiced – not to say realistic – view on this, could do worse than consult Bloomberg’s ever intelligent William Pesek).

But Fons target this week is not the investor-seeking financial press, but rather his own compatriots, the Dutch politicians, and how they have turned the creative use of statistics into an art form, for, as he says:”Dealing with figures is an art: the Dutch call themselves the Chinese of Europe, for a good reason.”
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