Indeterminacy, intergenerational redistribution, endogenous longevity and human capital accumulation
AbstractThis paper sets up an OLG economy with endogenous life expectancy to study how fiscal policy that redistributes between generations can open the door to sunspot equilibria. Agents invest independently in their own human capital, produce and consume output, and receive a pension upon retirement. The model produces an expectations coordination problem that can explain significant differences in growth paths followed by otherwise identical countries. In particular, we show that our economy may be characterised by local indeterminacy of dynamic equilibria, and hence feature fluctuations which are driven by extrinsic uncertainty.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Exeter University, Department of Economics in its series Discussion Papers with number 0401.
Date of creation: 2004
Date of revision:
Contact details of provider:
Postal: Streatham Court, Rennes Drive, Exeter EX4 4PU
Phone: (01392) 263218
Fax: (01392) 263242
Web page: http://business-school.exeter.ac.uk/about/departments/economics/
More information through EDIRC
Endogenous Longevity; Human Capital; Intergenerational Redistribution; Local Indeterminacy; Sunspots.;
Other versions of this item:
- Cipriani, Giam Pietro & Makris, Miltiadis, 2007. "Indeterminacy, intergenerational redistribution, endogenous longevity and human capital accumulation," Journal of Economic Dynamics and Control, Elsevier, vol. 31(2), pages 613-633, February.
- E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
- H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
- J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Matteo Cervellati & Uwe Sunde, 2005. "Human Capital Formation, Life Expectancy, and the Process of Development," American Economic Review, American Economic Association, vol. 95(5), pages 1653-1672, December.
- Blackburn, Keith & Cipriani, Giam Pietro, 2002. "A model of longevity, fertility and growth," Journal of Economic Dynamics and Control, Elsevier, vol. 26(2), pages 187-204, February.
- Tamura, Robert, 2006.
"Human capital and economic development,"
Journal of Development Economics,
Elsevier, vol. 79(1), pages 26-72, February.
- Stephanie Schmitt-Grohe & Martin Uribe, 1995.
"Balanced-budget rules, distortionary taxes, and aggregate instability,"
Finance and Economics Discussion Series
95-44, Board of Governors of the Federal Reserve System (U.S.).
- Schmitt-Grohe, Stephanie & Uribe, Martin, 1997. "Balanced-Budget Rules, Distortionary Taxes, and Aggregate Instability," Journal of Political Economy, University of Chicago Press, vol. 105(5), pages 976-1000, October.
- Eric W. Bond & Ping Wang & Chong K. Yip, 1993.
"A general two-sector model of endogenous growth with human and physical capital: balanced growth and transitional dynamics,"
9324, Federal Reserve Bank of Dallas.
- Bond, Eric W. & Wang, Ping & Yip, Chong K., 1996. "A General Two-Sector Model of Endogenous Growth with Human and Physical Capital: Balanced Growth and Transitional Dynamics," Journal of Economic Theory, Elsevier, vol. 68(1), pages 149-173, January.
- Benhabib, Jess & Gali, Jordi, 1995. "On growth and indeterminacy: some theory and evidence," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 43(1), pages 163-211, December.
- Cipriani, Giam Pietro & Makris, Miltiadis, 2006. "A model with self-fulfilling prophecies of longevity," Economics Letters, Elsevier, vol. 91(1), pages 122-126, April.
- Cazzavillan, Guido, 1996. "Public Spending, Endogenous Growth, and Endogenous Fluctuations," Journal of Economic Theory, Elsevier, vol. 71(2), pages 394-415, November.
- Becker, Gary S & Murphy, Kevin M & Tamura, Robert, 1990.
"Human Capital, Fertility, and Economic Growth,"
Journal of Political Economy,
University of Chicago Press, vol. 98(5), pages S12-37, October.
- Gary S. Becker & Kevin M. Murphy & Robert F. Tamura, 1990. "Human Capital, Fertility, and Economic Growth," NBER Working Papers 3414, National Bureau of Economic Research, Inc.
- Gary S. Becker & Kevin M. Murphy & Robert Tamura, . "Human Capital, Fertility, and Economic Growth," University of Chicago - Population Research Center 90-5a, Chicago - Population Research Center.
- Cervellati, Matteo & Sunde, Uwe, 2005. "Human capital formation, life expectancy, and the process of development," Munich Reprints in Economics 20083, University of Munich, Department of Economics.
- Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
- Benhabib, Jess & Farmer, Roger E.A., 1999. "Indeterminacy and sunspots in macroeconomics," Handbook of Macroeconomics, in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 6, pages 387-448 Elsevier.
- Jang-Ting Guo & Kevin J. Lansing, 1997.
"Indeterminacy and stabilization policy,"
9708, Federal Reserve Bank of Cleveland.
- Ehrlich, Isaac & Lui, Francis T, 1991. "Intergenerational Trade, Longevity, and Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 99(5), pages 1029-59, October.
- Jaime Alonso-Carrera & María Jesús Freire-Serén, 2002.
"Multiple equilibria, fiscal policy, and human capital accumulation,"
0204, Universidade de Vigo, Departamento de Economía Aplicada.
- Alonso-Carrera, Jaime & Freire-Seren, Maria Jesus, 2004. "Multiple equilibria, fiscal policy, and human capital accumulation," Journal of Economic Dynamics and Control, Elsevier, vol. 28(4), pages 841-856, January.
- David N. Weil & Oded Galor, 2000. "Population, Technology, and Growth: From Malthusian Stagnation to the Demographic Transition and Beyond," American Economic Review, American Economic Association, vol. 90(4), pages 806-828, September.
- Nordblom, Katarina, 2003. "Is increased public schooling really a policy for equality?: The role of within-the-family education," Journal of Public Economics, Elsevier, vol. 87(9-10), pages 1943-1965, September.
- Park, Hyun & Philippopoulos, Apostolis, 2004. "Indeterminacy and fiscal policies in a growing economy," Journal of Economic Dynamics and Control, Elsevier, vol. 28(4), pages 645-660, January.
- Giam Pietro Cipriani & Miltiadis Makris, 2012.
"Payg Pensions And Human Capital Accumulation: Some Unpleasant Arithmetic,"
University of Manchester, vol. 80(4), pages 429-446, 07.
- Giam Pietro Cipriani & Miltiadis Makris, 2009. "PAYG Pensions and Human Capital Accumulation: Some Unpleasant Arithmetic," CHILD Working Papers wp19_09, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Carlos Cortinhas).
If references are entirely missing, you can add them using this form.