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Demographic structure and capital accumulation

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  • d'Albis, Hippolyte

Abstract

This paper develops an overlapping-generations (OLG) model to analyze the consequences of demographic structure changes induced by an exogenous shift in the birth rate.We first show that a finite growth rate of the population that maximizes long-run capital per capita exists. Then, we examine the theoretical properties of this growth rate by showing that: (i) it corresponds to the demographic structure such that the average ages of capital holders and workers are equal; (ii) it is associated to an efficient steady state; (iii) it increases with compulsory transfers from younger to older generations. Finally, we explain why standard OLG models do not exhibit such a growth rate.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Theory.

Volume (Year): 132 (2007)
Issue (Month): 1 (January)
Pages: 411-434

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Handle: RePEc:eee:jetheo:v:132:y:2007:i:1:p:411-434

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Web page: http://www.elsevier.com/locate/inca/622869

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  19. Burke, Jonathan L., 1996. "Equilibrium for Overlapping Generations in Continuous Time," Journal of Economic Theory, Elsevier, vol. 70(2), pages 364-390, August.
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