Monetary policy is likely to become increasingly constrained in economies with ageing populations, researchers at the Bank of Korea find.

Past studies have arrived at conflicting conclusions about the effects of an ageing population on a country’s economy. However, the BoK research, published on July 30, says the outcome is likely to be weakness across an array of indicators. It predicts slower growth, lower real interest rates, “modest” disinflationary pressure and weaker banks with thinner