The 21st International Conference on Pensions, Insurance, and Savings was a great opportunity to present our research on the macroeconomic consequences of demographic change. Sylwia presented our joint work on how population aging affects unemployment dynamics and monetary policy in the Euro area, and we received many insightful comments and suggestions.

Our study builds on a large-scale DSGE-OLG-NK model with labor market frictions and rich age structure, aiming to capture the interaction between demographics, job flows, and policy trade-offs. Inspired by the observed decline in unemployment alongside population aging, we examined both empirical regularities and theoretical mechanisms driving this trend.

We find that aging reduces unemployment through both compositional and behavioral effects, and lowers the cost of stabilizing inflation—especially in terms of unemployment volatility. The results suggest that optimal monetary policy becomes more hawkish in an older society, as the structure of the labor market evolves. We're very grateful for the inspiring discussion and look forward to continuing the dialogue.