Inflation And Unemployment In Canada

As the population ages, the inflation is less alternative to unemployment. In an aging society, the tolerance of inflation is at a lowland, the trade-off between inflation and unemployment changes in times, this will lead to a serious problem between inflation and unemployment which affects the choice made by central bank. For monetary policy, the relationship between inflation and unemployment has always been a bone of contention. The movements in population structure caused by labor supply, capital stock and the change of risk and return preference will whether affect the relationship between inflation and unemployment or lead to changes in macroeconomic policy trade-off balance. All of these are based on the long-term population structure …show more content…
With the retirements of these baby boomers in Canada, the decreasing labour force may cause the reduction in technology development resulting in a negative productivity. Labor shortages will take a more serious issue in restricting Canadian’s economic development. “with the exit of workers from the labour force, it is extremely difficult to meet high rates of gross domestic product growth.” Based on Robert’s opinion, we can assume pessimistically that aging in the society causes an increase in unemployment. In general, older workers have less productivity than younger workers. And when the percentage of aged workers is higher than younger workers, it will directly affect the gross domestic product growth in a gentle but negative way. Labor productivity will need to improve and beyond this mechanism to compensate the influence of population aging on domestic production. Thus we need more education and training to speed up the formation of human capital. Also is that we need to cope with the effects of aging through human capital investment. And this kind of investment has certain offset the negative effect of aging on the labour market. When labour becomes more expensive, aging population tend to encourage people to replace labor with physical capital. It will also encourage human capital investment, especially for young generations. Historical …show more content…
It is not obvious to see from today’s economy, but the potential power goes on in next 10 years. Aging population is slowing down the pace of labor force growth. In response to the financial difficulties brought by this change of population structure, young generation may face pressures such as tax revenue growth, reduction of social welfare and hard to find jobs. Thinking of some solutions for this problem are to accept more immigration families to cover the labour force shock caused by baby boomers or to raising retirement age to stay labour force as a steady point. The most but not the least important thing is to improve the ability of efficiency of science and technology innovation and the work productivity to effectively reduce the pressure of the aging population brings to our economy. Population aging is an inevitable trend all over the world. It brings changes to the economic development in our country as well as the huge pressure and heavy burden for the economic development of our country. What we can do is to solve difficulties and seize the opportunity so that we can effectively promote the sustainable development of economy in our

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