Economic Effects of an Aging Population

As elderly market will grow bigger, young market will shrink smaller. Population Aging problem should be carefully handle.

At Issue: Population aging is one of the key demographic trends facing the world today. Aging is particularly pronounced in developed countries, with the median age projected to rise to 45 by 2050. What are the economic effects of an aging population? How does increased dependency of elders on working-age adults affect consumption and government finances, today and in the future? This paper sheds light on these pressing issues.

Approach: The author first considers the causes of population aging, examining how they will affect the economy, both today and in the future. He then looks at the means supporting the elderly in their retirement, whether their own savings or transfers from family or from the government. The author draws on existing studies and available data to make theoretical predictions about how these sources of support will be affected by a larger proportion of retirees.

Findings: Longer life expectancy and reduced fertility rates have contributed to population aging, with the latter cause dominating. Lower fertility initially reduces the dependency of the young on working-age adults, increasing the latter’s consumption possibilities. Over time, however, dependency of elders on working-age adults increases, as there are fewer adults entering the workforce. Combined with longer life expectancy, total dependency on adults will rise. This will reduce workers’ incentive to save, since the existence of fewer workers reduces return on investments. It will also strain public finances, as the need to fund social security will lead to higher payroll taxes.

Novelty: Population aging represents a source of potential economic crisis for developed nations. Furthermore, this phenomenon is likely to get worse in the future. The paper paints a stark picture of what we may expect as the elderly become a larger proportion of the population, and provides a complete picture that is lacking in other, less broad studies of this topic. The basic message is clear: with fewer workers supporting more people, something has to be given up.

From: www.smarteconomist.com

Technology & Mechanics - Automotive Color Trends

Troy, Michigan, U.S.A., November 29, 2006
DuPont’s 2006 Color Popularity Report Shows Global Trends in Automotive Color Choice

• 2006 article, however, gives a good overview on forecasting popular car colors and on relating past automobile color trends with social trends over the years.

• Below is a quote from the article. Here, the author is talking about how out of the top ten popular car colors for a given year, the bottom half of these are likely to be a trend for the future. Could this philosophy apply in apparel too?

“Typically the bottom half of the top ten colors point to the growth trend for future colors. A clear trend for the future includes warmer tones such as red as well as the continued strength of blue.”

• The following is an excerpt from the article. Here, a socionmics analyst discusses a correlation between the popularity of the color silver and the social optimism surrounding the stock market boom in our year of interest, 2000. The author also makes a forecast for white being a popular color in the future (after 2006) by striking a parallel between the economic change we are seeing in modern day to that in the late 1960s.

Business and Larger Economic and Social Trends

According to the Socionomics Institute in Gainesville, Georgia, color trends provide insight into the larger public mood in North America. “The popularity of silver has correlated with the optimism that attended the twin financial manias of the past nine years, the stock market boom surrounding the year 2000 and the housing boom since then,” said Mark Galasiewski, a senior analyst at the Institute. “The spread of silver’s popularity worldwide since 1998 has also mirrored the synchronization of global equity markets.” The Institute’s research into historical financial and social trends suggests that such synchronization eventually tempers as society enters a period of dynamic change. The coming period could be remarkably similar to the late 1960s and early 1970s, when white, a color that had championed a long economic expansion, suddenly faced challengers. White’s market share, which had peaked at 20.8 percent in 1963, eventually slid to the mid-single digits by the early 1970s. From 1968 to 1972, earth tones such as medium brown-gold, copper-bronze, and medium and dark green dominated the top positions.

The mood of the late ‘60s also initiated the design of brightly colored muscle and racing cars highlighted with yellow-influenced colors such as orange. In the positive mood cycle that began in the early 1980s, red dominated that vehicle segment for 12 years until 1997, and has since waned.

“Although yellow never achieved the broad popularity of red, the color may now be having its day in the sun,” said Galasiewski. “The currently re-emerging horsepower wars among the automobile manufacturers also support the late 1960s parallel.”


***see the rest of the article: http://www2.dupont.com/Automotive/en_US/news_events/article20061129.html