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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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References

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  1. Michel, Philippe & Pestieau, P, 1993. "Population Growth and Optimality: When Does Serendipity Hold?," Journal of Population Economics, Springer, vol. 6(4), pages 353-62, November.
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Citations

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Cited by:
  1. Hippolyte D'Albis & Emmanuelle Augeraud-Véron, 2011. "Continuous-Time Overlapping Generations Models," Post-Print hal-00424799, HAL.
  2. Momota, Akira & Horii, Ryo, 2011. "Timing of childbirth, capital accumulation, and economic welfare," MPRA Paper 34088, University Library of Munich, Germany.
  3. Maik T. Schneider & Christian Traeger & Ralph Winkler, 2010. "Trading Off Generations: Infinitely-Lived Agent Versus OLG," CER-ETH Economics working paper series 10/128, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
  4. Miguel Sánchez Romero & Concepción Patxot & Elisenda Renteria & Guadalupe Souto, 2010. "From transfers to capital: analyzing the Spanish demand for wealth using NTA," MPIDR Working Papers WP-2010-029, Max Planck Institute for Demographic Research, Rostock, Germany.
  5. Andreas Irmen, 2009. "Population Aging and the Direction of Technical Change," CESifo Working Paper Series 2888, CESifo Group Munich.
  6. Izmirlioglu, Yusuf, 2008. "The Impact of Population Ageing on Technological Progress and TFP Growth, with Application to United States: 1950-2050," MPRA Paper 24687, University Library of Munich, Germany.
  7. Heijdra, Ben J. & Romp, Ward E., 2009. "Human capital formation and macroeconomic performance in an ageing small open economy," Journal of Economic Dynamics and Control, Elsevier, vol. 33(3), pages 725-744, March.
  8. Klaus Prettner & Alexia Prskawetz, 2010. "Demographic Change in Models of Endogenous Economic Growth. A Survey," Working Papers 1008, Vienna Institute of Demography (VID) of the Austrian Academy of Sciences in Vienna.
  9. Narciso, Alexandre, 2010. "The impact of population ageing on international capital flows," MPRA Paper 26457, University Library of Munich, Germany.
  10. Turnovsky, Stephen J., 2011. "On the role of small models in macrodynamics," Journal of Economic Dynamics and Control, Elsevier, vol. 35(9), pages 1605-1613, September.
  11. d'Albis, Hippolyte & Augeraud-Véron, Emmanuelle & Schubert, Katheline, 2010. "Demographic-economic equilibria when the age at motherhood is endogenous," Journal of Mathematical Economics, Elsevier, vol. 46(6), pages 1211-1221, November.
  12. Miguel Sánchez Romero, 2011. "The role of demography on per capita output growth and saving rates," MPIDR Working Papers WP-2011-015, Max Planck Institute for Demographic Research, Rostock, Germany.
  13. Ben J. Heijdra & Jochen O. Mierau, 2009. "Annuity Market Imperfection, Retirement and Economic Growth," CESifo Working Paper Series 2717, CESifo Group Munich.
  14. Mikkel Nørlem Hermansen, 2011. "Non-Existence of Steady State Equilibrium in the Neoclassical Growth Model with a Longevity Trend," Economics Working Papers 2011-04, School of Economics and Management, University of Aarhus.

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