But dependency ratios are likely to worsen for decades to come and the growth rate of output to decline. Many of those who argue that personal sector savings will remain high enough to keep real interest rates and aggregate demand low (the secular stagnation camp) do so on the assumption that (i) the age of retirement will rise relative to the expected age of death, and/or (ii) that state benefits to the old will fall relative to the average income of workers. If either were to happen, the rate of increase of expenditure on the elderly would be less than the output generated by workers. Both
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