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Optimal Investment, Education, And Consumption Under Demographic Changes For A Small-Open Economy

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  • HOAN XUAN PHAM

    (Insurance Commission, Ministry of Finance, Vietnam, 24 Tran Hung Dao, Hanoi, Vietnam)

Abstract

It is shown, using a vintage model of education which is developed in this paper, that given the assumptions of the model, the optimal path of investment in education is to keep the level of investment per student constant and the optimal path of investment in physical capital is to keep the capital-labor ratio constant over time. The pressure to reduce current consumption caused by population ageing is partly mitigated by the fact that a younger population, in the current time, is relatively more efficient in producing utility than an older one, in the future.

Suggested Citation

  • Hoan Xuan Pham, 2009. "Optimal Investment, Education, And Consumption Under Demographic Changes For A Small-Open Economy," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 54(01), pages 41-59.
    • Handle: RePEc:wsi:serxxx:v:54:y:2009:i:01:n:s021759080900315x
    DOI: 10.1142/S021759080900315X
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    References listed on IDEAS

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    1. Cunha, Flavio & Heckman, James J. & Lochner, Lance, 2006. "Interpreting the Evidence on Life Cycle Skill Formation," Handbook of the Economics of Education, in: Erik Hanushek & F. Welch (ed.), Handbook of the Economics of Education, edition 1, volume 1, chapter 12, pages 697-812, Elsevier.
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    Cited by:

    1. Renuga Nagarajan & Aurora A.C. Teixeira & Sandra T. Silva, 2013. "The impact of population ageing on economic growth: an in-depth bibliometric analysis," FEP Working Papers 505, Universidade do Porto, Faculdade de Economia do Porto.
    2. Renuga Nagarajan & Aurora A. C. Teixeira & Sandra Silva, 2017. "The Impact Of Population Ageing On Economic Growth: A Bibliometric Survey," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 62(02), pages 275-296, June.

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