Over coming decades demographic shifts will have a profound effect on the world
economy—both directly on the countries undergoing demographic change, as well as indirectly through changes in global trade and capital markets. Yet the tools needed to better understand the general equilibrium consequences of significant demographic change are still not adequately developed. Without these tools, there is likely to be a policy vacuum. As a first step in developing a better framework for dealing with global demographic change, this paper surveys the areas in which we need to improve existing global analytical frameworks to deal with the range of important policy issues that will emerge as a part of the demographic shifts. The paper attempts to summarize what is now known, identifies areas where important unresolved debates still exist, and explores theoretical and empirical issues on which more research needs to be undertaken.